Mortgage servicers are beginning to test systems for a new Department of Veterans Affairs program designed to help struggling veteran homeowners catch up on missed mortgage payments and avoid foreclosure.
The VA Partial Claim Program allows an eligible borrower’s servicer to advance the money needed to bring a delinquent VA-backed loan current. The VA then reimburses the servicer, and the borrower generally does not repay that deferred amount until the original mortgage is paid off, refinanced, or the home is sold.
Unlike a refinance or some loan modifications, a partial claim does not replace the borrower’s existing mortgage or increase its monthly payment. Borrowers must successfully complete a three-month trial payment plan before receiving the assistance.
The VA began accepting trial payment plan events for partial claims June 15. Servicers have until Nov. 28 — 180 days after the final policy was published June 1 — to update their technology, procedures, and employee training.
Servicers cannot introduce the partial claim by itself. VA guidance requires them to implement it alongside the agency’s revised loss mitigation waterfall, which establishes the order in which a delinquent borrower must be considered for repayment plans, loan modifications, the partial claim, and other foreclosure alternatives.
Dallas-based Outamation, a mortgage technology company specializing in servicing automation, said Tuesday that clients have begun testing VA partial claim decisioning through OutamateMods, its platform for automating loan modifications and other home-retention options.
The company said its system applies the VA waterfall to determine which option may be available to a borrower and handles related modification and partial claim documents. Outamation described itself as the first technology provider to put a completed VA partial claim solution into client user acceptance testing.
“The VA gave servicers 180 days. We made sure our clients would not be scrambling on day 179,” Outamation founder and CEO Sapan Bafna said.
User acceptance testing is a stage during which clients test whether technology works correctly in practical situations before placing it into full production. Reaching that stage does not mean the system is processing live partial claims, but it gives servicers time to identify calculation, documentation, and workflow problems before the deadline.
The VA has also been updating its supporting technology and training. The agency revised the VALERI Events Bulk Upload Template used by servicers on June 26. Additional VA training sessions covering the partial claim payment process and post-completion audits have not yet been scheduled.
The program fills part of the foreclosure-prevention gap left when the VA Servicing Purchase program ended in May 2025. NMP reported in June that the permanent partial claim gives VA borrowers an option already available through other government-backed mortgage programs.
For Loan Originators, implementation remains primarily a servicing matter, but the program strengthens the assistance available to veteran borrowers after closing. Originators should understand the basic option when discussing the VA loan program, while directing borrowers experiencing payment trouble to their mortgage servicer or a VA loan technician. Because servicers have until Nov. 28 to implement the program, availability may vary during the transition.
