How will the VA Home Loan Program Reform Act affect the housing market?

The VA Home Loan Program Reform Act (H.R. 1815), signed into law by President Trump on July 30, 2025, is set to significantly impact the housing market, particularly for veterans. The act introduces several key changes aimed at modernizing the VA Home Loan Program and enhancing protections for veterans in the housing market. Here's how the reform is likely to affect the market: 1. **Foreclosure Prevention**: The establishment of a partial claim program allows the VA to advance funds to cover missed payments for borrowers in serious delinquency, enabling them to become current on their mortgage without refinancing or altering their original loan terms. This is expected to reduce the number of foreclosures significantly, as veterans will have access to federal assistance to address their financial hardships. 2. **Buyer Agent Compensation**: The act permanently eliminates the prohibition on veterans paying their real estate agents directly, which was a major barrier in competitive markets. This change is expected to level the playing field for veterans in the housing market, allowing them to compete more effectively with other buyers. 3. **Market Accessibility**: By allowing veterans to directly compensate their agents, the reform is set to increase the accessibility of the VA Home Loan Program, making it easier for veterans to purchase homes in various markets, including hot markets like Florida and California. 4. **Delinquent Loan Management**: The legislation authorizes the VA to take certain actions in cases of default on home loans under the VA home loan program, including the payment of holders of guaranteed loans to avoid foreclosure. This is expected to streamline the management of delinquent loans and reduce the administrative burden on both the VA and mortgage holders. 5. **Homeless Prevention**: The act includes funding for the VA Grant and Per Diem program, which supports community agencies providing services to veterans experiencing homelessness. This component of the reform is crucial in preventing homelessness among veterans, which is a significant concern. In conclusion, the VA Home Loan Program Reform Act is poised to have a substantial positive impact on the housing market for veterans. By providing them with more financial assistance, flexibility, and access to real estate services, the act is likely to increase the number of veterans who can maintain their homes and improve their overall housing security. This, in turn, could lead to a more stable and active veteran population, contributing to a more robust and diverse housing market.