VA HOME LOAN COVID RELIEF IS EXTENDING UNTIL MAY 31, 2024


By bblouin
A key in a door of a home after receiving va home loan covid relief.

When the COVID-19 pandemic hit, life as we knew it changed in many ways. While we are back to normal in many ways, economic pressures surrounding housing continue to persist. This is in part causing the U.S. Department of Veterans Affairs (VA) to reconsider and extend its housing program. Those who are receiving VA home loan COVID relief are getting an extension. This aims to help avoid foreclosures and takes away some of the financial pressures military families might face. Suggested read: Remembering the Life of First Lady Rosalynn Carter

VA Home Loan COVID Relief Extension Helps Vets Avoid Foreclosure

Originally, VA home loan COVID relief was set up to provide a forbearance for 6 to 12 months. This would allow Veterans the opportunity to make mortgage payments later while enjoying temporary relief. Specifically, Veterans were not to pay everything at once. But now that VA home loan COVID-19 assistance is ending, the reality is much different than the intent. Since the VA loan COVID forbearance ended in October 2022, homeowners are finding that they now owe all of the money at once. An investigation by the National Public Radio (NPR) would show that there were around 6,000 Veteran homeowners at risk of foreclosure. As a result, the VA decided to extend the disaster loan modification from COVID-19. Many politicians were calling for action following NPR’s report and now the VA is doing something about it. The extension means that there are to be no foreclosures on VA-guaranteed loans through May 31, 2024. Related read: Transgender Veterans Are Demanding VA Provide Surgeries as Promised

The VA Servicing Purchase (VASP) Program

Veterans are not only getting an extension to avoid foreclosures but the VA is working on a new program to provide relief moving forward. Known as the VA Servicing Purchase (or VASP) Program, the organization is purchasing defaulted VA loans, modifying them, and putting them within its VA loan portfolio. Having the VA loan forbearance helped the community but there are still adjustments necessary moving forward. VA loans are noted for their low foreclosure rates and during the pandemic, Veteran homelessness was down 11%. Part of the concern is that even with the extension, not providing additional solutions, such as the VASP Program, may find some Veterans facing homelessness anyway. Those in need of assistance can reach out to the VA’s housing assistance office at 877-827-3702 or by visiting them online.

Exploring Your Options Following VA Home Loan COVID Relief

Looking at the Consumer Relief Guide provided by the Conference of State Bank Supervisors (CSBS), Veterans can gain a greater perspective as to what their options may be. But please note that this is not financial advice and a lot has changed since 2020. Still, when we look at the intent of the CARES Act, it’s clear to see some of the options you may be best to explore with your lender. Here are some of the highlights:

  • Fees, penalties, and additional interest are not accrued with your forbearance. However, mortgage payments, taxes, and home insurance must be paid once the relief is finished.
  • It was never the intent for lump-sum repayments to be the only option. Veterans are supposed to have many other avenues of repayment.
  • One example includes an increase in monthly payments until you fully repay the debt. The increase depends on your ability to make new payments each month.
  • Additional VA loan modification after COVID forbearance is available depending on your lender; however, you will need to show your income and expenses to qualify.

Anyone looking to make an adjustment or better understand their options should contact their mortgage officer. VA home loan COVID relief is still a very relevant tool for many Veterans, and understanding your options is key for financial stability. Read next: VA Home Loan: What You Need To Know To Get One


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