VA Loan Modification


VA Loan Modification

A VA loan is a government-backed mortgage option available to Veterans, service members and surviving spouses. VA loans are made by private lenders, like mortgage companies and banks, and not the Department of Veterans Affairs. VA home loans offer competitive interest rates and terms and can be used to purchase a single-family home, condominium, multi-unit property, manufactured house or new construction.


VA Loan Modification

The mortgage servicer’s main responsibility is to work to resolve the default. When VA deems a need for other information or action, we initiate contact with you to:

  • Offer financial counseling.
  • Discuss the loss mitigation options considered.
  • Sometimes serve as an intermediary between you and your mortgage servicer to negotiate a resolution.

VA then helps the servicer and you arrange a loss mitigation option, like one of those noted below:

Repayment Plan – You pay a regular payment plus part of the missed payments each month until you bring the loan current.
Special Forbearance – The servicer agrees not to start foreclosure to allow you time to repay the missed payments. This could be like if you’re waiting for a tax refund.
Time to arrange a private sale – The servicer agrees to delay foreclosure to allow a sale to close if it will pay off the loan.
Loan Modification – You get a fresh start by adding the missed payments to the loan balance and creating a new payment schedule.
Refunding – VA can consider refunding (buying) the loan and modifying it to make the payments easier for you to afford.
Short Sale – You sell your home for less than what you owe, and VA pays the difference, up to the maximum guarantee on the loan.
Deed-in-Lieu of Foreclosure – You voluntarily deed the property to the servicer to avoid foreclosure and VA pays the difference between the payoff and the net property value.



You may qualify for a VA loan by meeting one or more of the following requirements:

  • You served 90 consecutive days of active service during wartime.
  • You served 181 days of active service during peacetime.
  • You have 6 years of service in the National Guard or Reserves, or served 90 days (at least 30 of them consecutively) under Title 32 orders.
  • You are the spouse of a service member who died while serving or due to a service-related disability.

If you don’t meet the basic service requirements for a VA loan, you may still be eligible. In these cases, eligibility depends on the discharge type. If your discharge falls into any of the following categories, you might still qualify for a VA loan:

  • You were discharged for hardship, or at the convenience of the government, or a reduction in force.
  • You were discharged for a medical condition or service-connected disability.
  • You were discharged for early-out and served at least 21 months of a 2-year enlistment.


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