Mortgage servicers have until November 28, 2026, to fully implement the VA Loss Mitigation Waterfall and VA Partial Claim Program.

Both programs became available on June 15. VA’s 180-day implementation period runs from June 1, the date the final policy was published. The Loss Mitigation Waterfall and Partial Claim Program must be implemented together; servicers can offer a partial claim only when the waterfall directs the borrower to that option.

How the VA Partial Claim Program works

Established under the VA Home Loan Program Reform Act, the Partial Claim Program gives eligible borrowers experiencing financial hardship another option to avoid foreclosure. After a borrower successfully completes a three-month trial payment plan, the servicer advances funds to bring the mortgage current. The recoverable balance is generally due when the loan is paid off or refinanced, or when the property is sold.

The documentation differs from traditional partial claim programs. VA requires a Partial Claim Attestation Agreement rather than a separate promissory note and subordinate security instrument. VA does not provide a standardized form, so servicers are responsible for preparing the agreement in accordance with VA Servicer Handbook M26-4, Chapter 22.

What servicers should have ready

Before the November 28 deadline, servicers should confirm that they can:

• Apply the Loss Mitigation Waterfall and identify eligible borrowers for the Partial Claim Program.
• Manage the trial payment plan and related borrower communications.
• Prepare and retain the required Partial Claim Attestation Agreement.
• Process payment requests and complete required reporting through their operational systems.

VA has published implementation FAQs and training resources, and updated VALERI functionality to support servicers.

VA loss mitigation documents in Propel

As servicers prepare their workflows, Propel offers a practical documentation resource. Its library includes VA loss mitigation documents, including the Partial Claim Attestation Agreement, to support servicers’ VA loss mitigation processes.

Connect with our team to learn more about VA loss mitigation documents available in Propel.

Additional resources

VA Partial Claim Program and Loss Mitigation Waterfall FAQs for Servicers

VA VALERI Servicer Announcements