The Department of Veterans Affairs’ new partial claim program is moving into active servicing, with Pennymac implementing the updated loss-mitigation framework for VA-backed mortgages ahead of the federal deadline. HousingWire reported Aug. 6 that Pennymac became the first large mortgage servicer to roll out the new framework, including the partial claim option. Other VA servicers have until Nov. 28, 2026, to complete implementation.
The program opened for submissions June 15. It gives some delinquent borrowers who have recovered from a financial hardship a way to bring their mortgage current without paying all missed payments at once. Congress authorized the program through the VA Home Loan Program Reform Act, which became law July 30, 2025.
How the VA partial claim works
Under the program, a mortgage servicer advances funds needed to cover eligible arrears and bring the first mortgage current. The VA then reimburses the servicer.
The deferred partial-claim balance does not require monthly payments. It generally becomes due when the underlying mortgage is paid off, refinanced, or the property is sold, according to the VA’s June 15 program announcement.
An eligible borrower must first complete a three-month trial payment plan by making three consecutive on-time payments. The servicer then resolves the eligible delinquency and brings the loan current.
A borrower cannot select a partial claim independently. The servicer evaluates the loan through the VA’s Loss Mitigation Waterfall and determines which available option applies.
Who can qualify — and who cannot
The program is aimed at borrowers who have recovered from the hardship that caused the delinquency and can resume their regular mortgage payments but cannot immediately cover the arrears. Previous assistance can affect eligibility — VA servicer guidance says borrowers who received certain COVID-era VA partial claims or refund modifications on the same loan cannot receive another partial claim under the new program.
A partial claim is generally capped at 25% of the loan’s unpaid principal balance. The law allows up to 30% for certain borrowers who missed a mortgage payment between March 1, 2020, and May 1, 2025.
Pennymac moves early as November deadline approaches
VA began accepting trial-payment-plan submissions June 15, but availability still depends on the borrower’s servicer. Servicers received 180 days from the June 1 publication of the final policy to update their systems and procedures.
VA borrower guidance says servicers have until Nov. 28 to implement partial claims. Borrowers whose servicers have not finished that work may not yet have access to the new option.
Pennymac’s rollout puts the program into use months before the industrywide deadline. It also arrives as VA borrowers show signs of elevated repayment stress. The Close recently reported that VA delinquency reached 4.99% in the first quarter of 2026, while US foreclosure filings rose 21% year over year in the first half.
Partial claims can change distressed-sale timelines
A delinquent VA mortgage does not necessarily mean a homeowner must sell. For an eligible borrower who can resume normal payments, a partial claim may provide another route to cure the delinquency and remain in the home.
Agents should refer eligibility and loss-mitigation questions to the mortgage servicer. If a homeowner is already considering a sale, the timing of a partial-claim review could affect whether the property reaches the market and when.
An existing partial claim can also affect a later transaction because the deferred balance must be accounted for at payoff. A current payoff statement can help sellers and their agents understand expected proceeds before setting a listing strategy.
VA financing remains significant in the purchase market. The Close reported in May that the department guaranteed more than 500,000 loans in fiscal year 2025. As more servicers implement the partial-claim framework ahead of Nov. 28, agents in military-heavy markets may see the program increasingly shape distressed-sale conversations and listing timelines.