A new federal program meant to assist veterans pay their mortgages kicks off this week, seeking to help veteran homeowners maintain their mortgages after more than a year of the SARS-Cov-2 crisis.
The VA Partial Claim Payment Program is meant to “assist Veteran borrowers specifically impacted by the COVID-19 pandemic to resume making their regular (pre-COVID) mortgage payments after exiting forbearance,” the U.S. Department of Veteran Affairs says on its website.
The program, which went into effect on Tuesday, July 27, is set to last until October of last year. Participants must have a VA-backed loan and must have missed at least one mortgage payment since March of last year.
The VA says that for qualifying homeowners it will purchase the past-due amount of the homeowner’s mortgage, after which the homeowner will “execute a security instrument to be recorded as a second lien and an interest free promissory note to repay VA the partial claim amount.”
“VA understands the financial difficulty that the COVID-19 National Emergency has caused many borrowers,” the federal agency says. “As a result, VA wants to avoid situations where servicers require all accrued missed payments during COVID-19 forbearance periods to be repaid immediately.”