VA Partial Claim Program: How It Works in 2026

If you've fallen behind on a VA loan, there's a new way out that didn't exist a year ago. The VA Partial Claim Program, launched in June 2026, pays off your missed payments and moves them into a VA partial claim with no monthly payments and no change to your interest rate or principal-and-interest payment. In return, VA takes a secured interest in your home that ranks behind the rest of your mortgage balance. You settle it only when you sell, refinance, or pay the loan off. It's the first standing partial-claim option VA borrowers have ever had, and after a rough stretch for veterans facing foreclosure, it matters that you know it exists before a servicer's letter tells you.

How the VA Partial Claim Program works

The mechanics are simpler than most loss-mitigation options. Here's how VA describes them in its launch press release and its program article:

1. Your servicer identifies you. Per VA's press release, servicers identify Veterans who are in default and might qualify. You can also call them first.
2. You complete a three-month trial payment plan, making your regular monthly payment on time each month to show the missed payments were a rough patch, not the new normal.
3. The servicer pays your overdue balance, bringing the loan fully current. VA then reimburses the servicer.
4. The advance becomes a VA partial claim, which VA's article says "generally does not require immediate repayment." Under the current statute, VA takes a secured interest in your home that ranks behind the rest of your mortgage balance.
5. You repay it later, when the mortgage is paid off, refinanced, or the home is sold.

Your interest rate doesn't change. Your principal-and-interest payment doesn't change (the escrow part can still move with taxes and insurance). The catch-up money simply waits.

How much it can cover

The VA Home Loan Program Reform Act of 2025, now codified at 38 U.S.C. 3737, caps a partial claim at 25% of your unpaid principal balance — 30% for a borrower who missed a payment between March 1, 2020 and May 1, 2025. VA's servicer FAQ says the applicable limit is based on the payment due date reported on the Electronic Default Notification (EDN) for the existing, uncured default, so it's the start of your current default that counts. The cap is all or nothing: if bringing the loan current would take more than the cap, the loan doesn't qualify, and the FAQ says "Borrowers cannot buy down the delinquency as part of the PC." For a sense of scale:

Say your payment is $2,400 and you're six months behind: $14,400 in arrears. That's under 5% of a $300,000 balance, comfortably within the cap. A repayment plan would have you paying roughly $3,600 a month for a year to catch up ($2,400 plus $1,200 of arrears). The partial claim gets you to the same cured loan at $2,400 a month, with the $14,400 waiting in the wings as a lien.

The debt is personal, too. Under 38 U.S.C. 3737(e)(1), as amended by Pub. L. 119-37 in November 2025, a borrower who defaults on a partial claim is liable to VA for its loss, VA may charge administrative costs, fees, and interest on that default, and VA won't restore your home loan entitlement until the loss is repaid in full. In August 2026 VA also told servicers, in Circular 26-26-2, that a non-judicial foreclosure can discharge VA's partial-claim lien in states that allow non-judicial foreclosure of a home loan. In those states, VA says servicers should no longer start a judicial foreclosure solely because VA holds a partial claim interest in the property.

Partial claim vs. your other options

VA's loss-mitigation menu still includes older tools. Where the partial claim fits:

The partial claim is the only option on that list that cures the default without changing your principal-and-interest payment. It isn't free: the missed payments aren't erased, and the amount advanced stays owed, on top of your loan balance, until you pay it back. The House Veterans' Affairs Committee's summary of the reform law noted that every other federal home loan program offered a partial claim and VA didn't. VA borrowers only had a temporary COVID-era partial claim, the COVID-19 Veterans Assistance Partial Claim Payment program, created by a 2021 VA rule, which has since ended.

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Who qualifies

VA published its servicer policy for the program in final form on June 1, 2026, as M26-4 Changes 13 and 14; its servicer FAQ dates it to "the date the final policy was published on June 1, 2026." The final handbook text sits on KnowVA, VA's servicer knowledge base. The handbook quotes on this page come from the drafts VA posted on its own site, so treat them as the draft wording.

Under the current statute and that policy:

• A VA-guaranteed loan — the program doesn't cover conventional, FHA, or USDA mortgages.
• Your primary residence — the statute limits partial claims to the home you live in.
• At least three full months past due. The statute allows a partial claim on a loan in default or at imminent risk of default, but VA's servicer rules set a stricter bar: per VA's posted draft of its servicer handbook, M26-4 Chapter 5, the waterfall steps that include the partial claim "are only available for loans that are at least three (3) full months past due." You don't need to be in foreclosure proceedings, and per VA's servicer FAQ a foreclosure your servicer referred can still be reviewed; one brought by another party, such as an HOA, disqualifies the loan.
• Your servicer has to reach it through the waterfall. VA's FAQ says the partial claim "can only be offered to a borrower when directed to the option through the VA Loss Mitigation Waterfall," so you can't skip ahead to it.
• No COVID-era partial claim on the same loan. If you received a partial claim under a COVID-era program, including a COVID-19 Refund Modification, VA's FAQ says that would prohibit you from meeting the qualifying criteria for a new partial claim on the same guaranteed loan.
• The other handbook criteria. The posted draft of M26-4 Chapter 22 also lists: at least 12 monthly payments on the loan since origination (and, if the loan has been modified, at least 6 since the latest modification); no active bankruptcy (a dismissed Chapter 7, a dismissed or discharged Chapter 13, or a discharged Chapter 7 with the VA loan reaffirmed doesn't rule you out); the VA-guaranteed loan still in first-lien position; and every person obligated on the note signing the Partial Claim Attestation Document.
• A completed 3-month trial payment plan — VA uses it to confirm you can sustain the regular payment going forward.

Timing matters on both ends. The program launched in June 2026 and VA began accepting partial-claim trial-plan submissions June 15. On its consumer page VA puts the deadline this way: "Servicers have until November 28, 2026, to add partial claims to their systems." So if yours says it doesn't offer the program yet, that answer has a deadline. And the law authorizes partial claims for five years, through July 30, 2030, unless Congress extends it. The DAV, which pushed for the law signed July 30, 2025, called it a safety net for veterans "when financial hardships strike."

What happened to VASP — and why this replaced it

From 2024 until spring 2025, the backstop for badly delinquent VA borrowers was VASP, the Veterans Affairs Servicing Purchase program, under which VA bought the defaulted loan outright and restructured it at a low fixed rate. VA stopped new VASP enrollments in May 2025, and for about a year veterans in trouble had only the older tools.

The partial claim is the deliberately narrower replacement Congress wrote into law: instead of VA taking over your whole loan, it advances just the arrears. If your problem is the payment itself, not a temporary income gap, a partial claim won't shrink it, and a VA loan modification may fit better — that guide walks the full loss-mitigation waterfall VA servicers must work through, rung by rung. VA reports it helped 173,000 veterans avoid foreclosure in fiscal year 2025 through options like these.

If your finances have taken a harder hit — a bankruptcy on the record, for instance — the path back to good standing is longer but well mapped: our guide to VA loans after bankruptcy covers the waiting periods and rebuilding steps.

What to do this week if you're behind

1. Call your servicer and ask specifically: "Am I eligible for the VA Partial Claim Program?" Naming it tells them exactly what you're asking about.
2. Call VA if you get a shrug. VA loan technicians are at 877-827-3702 (TTY: 711), Monday–Friday, 8:00 a.m.–6:00 p.m. ET, per VA's announcement.
3. Don't wait for foreclosure paperwork. VA's own words: "Veterans do not have to wait until they are facing foreclosure to ask for help." Per VA's posted draft of its servicer handbook, the partial claim itself opens only once you're three full months behind, but calling earlier can get you reviewed for the waterfall's earlier steps, such as a repayment plan or special forbearance.
4. Keep every trial-plan payment on time. The three-month trial is the whole test. Per VA's posted draft of its servicer handbook, a trial payment not made by the 15th of the month it's due fails the plan; you can be reviewed again, but three failed trial plans in one default episode close off options that require one.

Bottom line

The VA Partial Claim Program is the strongest home-retention tool VA borrowers have had since the COVID-era protections ended: your missed payments get paid, your rate and principal-and-interest payment stay as they were, and repayment waits until you sell, refinance, or pay off. It isn't forgiveness, and it won't fix an unaffordable payment — but if a temporary setback put you behind, it's the option built for you, and it's available now. If you're on solid footing and thinking about your next move instead, start with our 2-minute eligibility check.