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How To Navigate VA Loan Forbearance

VA Loan Forbearance:

Are you facing challenges with your mortgage due to unforeseen circumstances? As a veteran, you have the opportunity to explore options provided by the Department of Veterans Affairs (VA) for home loan forbearance.

Forbearance is an arrangement in which your mortgage lender or servicer permits a temporary halt or reduction in your payment obligations for a designated period. Here’s an overview of the essential information regarding VA loan forbearance and the support mechanisms at your disposal.

What Unique Benefits Do VA Mortgages Offer? 

The VA has established various safeguards for servicemembers experiencing financial difficulties. Below are some options that may align with your needs.

VA Interest Rate Reduction Refinance Loan (IRRRL) 

Commonly known as the VA Streamline loan, the IRRRL offers a more expedient and less complicated refinancing process compared to traditional refinancing. To be eligible for a VA IRRRL, you must already have an existing VA loan.

Benefits of a VA Streamline include the ability to:

  • Switch from an adjustable-rate mortgage (ARM) to a fixed-rate mortgage
  • Reduce your monthly interest rate
  • Adjust your loan term

A VA IRRRL can ease your financial burden with additional advantages like minimal paperwork. Moreover, you have the option to incorporate closing costs and fees into your loan.

Loss Mitigation Options 

Not convinced about proceeding with an IRRRL? Discuss with your servicer other forms of assistance for which you might be eligible. Rocket Mortgage® clients are encouraged to complete our Application for Success. For a broader understanding of available alternatives, servicemembers can consult a VA loan technician. Your servicer is there to explore various solutions with you, including:

  • Repayment plans: This strategy involves spreading out missed payments over time by adding a certain amount to your monthly payment until you’re caught up.
  • Loan modifications: Here, the terms of your loan are altered to include your overdue balance, often changing the loan’s duration and interest rate.
  • Private sale: This allows some breathing room from foreclosure, giving you the chance to sell your home.
  • Short sale: With lender approval, you can sell your home for less than the outstanding mortgage balance, provided you demonstrate financial hardship.
  • Deed in lieu of foreclosure: This involves transferring your home’s deed to the lender, effectively releasing you from the property. Sometimes, relocation assistance for your next residence might be available.


In exceptional cases, the VA might refund your loan, taking over its servicing from the lender if satisfactory forbearance resolutions are not provided. Typically, this action is considered when payment difficulties arise from uncontrollable circumstances, with an expectation of future financial improvement.

Details on refunding status can be obtained through the Servicer Web Portal, which also allows for claim submissions with necessary documentation. The VA evaluates each case for refunding during its service adequacy review.

Caution Against Predatory Lending 

Veterans should be vigilant of predatory lenders practicing “churning,” where they persuade VA loan holders to repeatedly refinance.

The VA combats such practices by enforcing a “seasoning” requirement, meaning borrowers must have made at least six consecutive, timely payments on their loan before refinancing. Post-forbearance, six additional consecutive payments are required to meet this criterion, and the refinance loan’s closing date must be at least 212 days after the initial loan’s first payment due date.

Key Takeaway: The VA’s Dedication to Supporting Service Members and Their Housing Needs

The Department of Veterans Affairs (VA) offers a range of support options for service members, veterans, and eligible surviving spouses who are facing difficulties with their mortgage payments. It’s important to communicate with your mortgage servicer to explore the potential solutions available to you.

Considering a VA Interest Rate Reduction Refinance Loan (IRRRL)? Starting the process is straightforward. For those who might not find the IRRRL suitable, there are additional avenues for assistance available, including specific programs for clients requiring tailored support.



Reed Letson

Reed Letson

Reed offers two decades of expertise as a mortgage broker, focusing on veterans and first-time home buyers. With a strong grasp of real estate and mortgage markets, he empowers clients with practical insights. Reed's passion is guiding clients to build wealth through real estate investments and financing solutions.

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