'Height of insanity:' Trump ends VA mortgage rescue program; 15,000 veterans face higher payments, 700 see $1,000 hike

After the Trump administration ended a new mortgage-rescue program that so far has helped about 20,000 veterans avoid foreclosure and keep their homes, thousands of US military veterans are facing the brunt of it. They are forced to face higher mortgage payments, an investigative report by NPR shows. The report states more than 15,000 veterans saw their monthly payments rise by at least $150 after receiving loan modifications, while hundreds are now paying more than $1,000 extra every month.

The investigation, published on October 30, found that the closure of the Veterans Affairs Servicing Purchase (VASP) programme left many borrowers with fewer affordable options when they fell behind on mortgage payments. Some veterans who had secured low-interest home loans were subsequently pushed into modified mortgages carrying significantly higher interest rates.

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More than 15,000 veterans face higher monthly mortgage payments

According to NPR, more than 15,000 veterans who received loan modifications following financial difficulties experienced monthly payment increases of at least $150. More than 700 borrowers saw their payments rise by $1,000 or more. The findings also highlighted a significant difference between VA-backed mortgages and other government-supported home loans. Around 63% of veterans who received loan modifications faced higher payments, compared with just 2% of borrowers whose loans were backed by Fannie Mae and Freddie Mac.

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"This is the height of insanity," California Democratic Rep. Mark Takano, the ranking member of the House Veterans' Affairs Committee, told NPR after reviewing the findings. "These are veterans that are already financially distressed — they were already in trouble," he added.

Why did the Trump administration end the VASP programme?

The VASP programme was introduced during the Biden administration to help veterans who had fallen behind on mortgage payments. It allowed the VA to purchase delinquent loans from mortgage servicers and restructure them with an interest rate of 2.5%. The move left millions of military veterans with far worse options than most other American homeowners if they run into trouble paying their home loans.

Republicans in Congress have been critical of the VASP program, saying it puts too much taxpayer money at risk. The Trump administration officially ended VASP on May 1, 2025, without an immediate replacement.

Mortgage industry representatives and housing groups had warned that discontinuing the programme before introducing another affordable option could leave veterans exposed to higher borrowing costs.

Matthew Douglas of the Housing Policy Council, which represents major mortgage companies, said the consequences were predictable. "It's a mathematical certainty that borrowers are going to have those kind of shocking payment increases," he told NPR.