S. 1921: Veterans Housing Stability Act of 2025

The Veterans Housing Stability Act of 2025 seeks to amend existing laws related to housing loans for veterans. The primary purpose of this bill is to prevent and resolve defaults on loans guaranteed by the Department of Veterans Affairs (VA). Here are the key provisions of the bill:

Partial Claim Program

The bill establishes a new initiative called the Partial Claim Program. Under this program, the Secretary of Veterans Affairs can step in to assist veterans whose loans are in default or at risk of default. Specifically, if a loan is struggling, the Secretary can make a financial contribution to cover a part of the debt on behalf of the veteran.

• The Secretary can purchase a portion of the loan's indebtedness to help prevent the loan from going into default.
• Veterans receiving help under this program must enter into a noninterest-bearing agreement, committing to repay the amount agreed upon when the loan matures.
• The Secretary will have a secured interest in the property as collateral.
• The program allows for financial assistance of up to 25% of the unpaid principal balance on the loan. This limit can be increased to 30% in certain cases, such as for individuals who were already experiencing delinquency at the time the bill was enacted or during major disasters.

Administrative Measures

The bill includes various administrative provisions regarding the implementation of the Partial Claim Program. These provisions detail how the Secretary can require lenders (the holders of guaranteed loans) to act as agents for the Secretary in managing partial claims.

• Lenders may be expected to service the partial claims and take necessary actions to establish these claims, for which they will be compensated.
• The Secretary will hold decision-making authority regarding terms and conditions related to partial claims, and those decisions will not be subject to judicial review.

Default and Foreclosure Regulations

The legislation outlines regulations surrounding defaults and foreclosures related to partial claims:

• If a veteran defaults after participating in the program, they will be liable for any losses incurred by the Secretary.
• The program will temporarily reduce the amount of loan entitlement available to veterans while they are repaying a partial claim.
• Foreclosure procedures for loans connected to the Partial Claim Program will follow local laws.

Civil Penalties

The bill introduces civil penalties for loan holders who knowingly provide false information related to partial claims or other relevant sections. These penalties could equal double the loss incurred by the Secretary or an additional specified amount.

Encouragement to Pause Foreclosures

The Secretary of Veterans Affairs is encouraged to implement a moratorium on foreclosures of loans guaranteed under the relevant chapter until the Partial Claim Program is fully operational.

Compliance and Auditing

The bill specifies that the Secretary will also be responsible for establishing standards for processing payments under the program and will conduct random post-payment audits to ensure compliance with the requirements.

Clerical Amendments

Finally, the bill includes clerical amendments to reference the new sections created by this legislation in the existing legal framework regarding veterans' loans.

Relevant Companies

• PHM - PulteGroup, Inc.: This company may be affected as it is a homebuilder that provides properties for loans guaranteed by the VA. Changes in loan servicing and default handling could impact their sales and market dynamics.
• DHI - D.R. Horton, Inc.: As a major homebuilder, similar to PulteGroup, D.R. Horton could experience changes in market conditions influenced by fluctuations in VA loan defaults and foreclosures.
• KBH - KB Home: Another homebuilder that might see direct effects if veterans are more likely to retain homeownership through partial claims rather than defaulting.