Pennymac has quietly rolled out a VA partial claim option ahead of a November 2025 deadline set by the Department of Veterans Affairs, giving eligible VA loan borrowers a structured path to catch up on missed payments without refinancing or surrendering their current interest rate. For veterans who bought or refinanced at pandemic-era rates — many locked in below 3% — this distinction matters enormously.
The timing is not coincidental. As foreclosure auctions rise in Q2 2026, with FHA loans driving gains, servicers are watching VA delinquency trends with similar concern. VA loans have historically had low default rates, but the combination of elevated living costs, insurance pressures, and a rate environment that has kept mortgage rates near 6.6% or higher for an extended stretch has put a subset of VA borrowers under genuine financial strain.
What a VA Partial Claim Actually Does
A partial claim is a loss mitigation tool that moves a borrower’s past-due balance — principal, interest, and certain fees — into a subordinate, interest-free loan. That junior lien is repaid later, typically when the home is sold or refinanced. The primary mortgage continues on its original terms.
For VA borrowers, this is a significant development. Until recently, the VA’s loss mitigation toolkit lagged behind FHA’s, which has offered a similar partial claim option for years. The VA’s own Veterans Affairs Servicing Purchase (VASP) program, introduced in 2024, provided some relief by allowing the VA itself to purchase and modify distressed loans — but servicers were responsible for navigating the handoff, and uptake was uneven.
The new partial claim framework changes the mechanics. Rather than routing the loan through a VA purchase, eligible borrowers work directly with their servicer — in this case Pennymac — to have the arrearage separated out. The primary loan stays intact. The borrower does not need to qualify for a new loan or accept a higher interest rate.
Why Rate Preservation Matters Right Now
This point deserves emphasis. A veteran who purchased a Florida home in 2021 at a 2.75% fixed rate and hit a rough stretch — a medical event, a job disruption, a divorce — faces a painful calculus if the only resolution available is a loan modification at today’s market rate. Even a modification to 6.5% on a $350,000 balance would add several hundred dollars to the monthly payment, potentially making the home unaffordable by a different mechanism.
The partial claim sidesteps that outcome. The servicer separates the past-due balance, the veteran resumes regular payments at the original rate, and the subordinate lien sits quietly until disposition of the property. No refinance trigger. No rate reset.
The November Deadline: What Borrowers Need to Know
The VA has set a deadline — currently understood to be November 1, 2025 — after which the transition away from VASP and toward the new partial claim framework becomes the primary avenue for borrowers in distress. Servicers were given advance guidance to prepare their systems and staff accordingly. Pennymac, as one of the largest VA loan servicers in the country, is among the first to announce readiness ahead of that date.
For borrowers, the practical implication is this:
- Act before the deadline, not after it. Loss mitigation applications submitted well before November 1 allow time for processing, document review, and any back-and-forth with the servicer — without the pressure of a hard cutoff.
- Contact your servicer directly. Eligibility for the partial claim option depends on factors including the number of missed payments, the reason for default, and whether the borrower has the income to resume regular payments. Pennymac’s outreach team and VA-trained loss mitigation staff are the right starting point.
- Gather documentation in advance. Most servicers will require proof of income, a hardship letter, and recent bank statements. Having these ready shortens the review timeline significantly.
- Understand the subordinate lien. The deferred balance becomes a second lien on the property. This does not require monthly payments, but it must be satisfied when the home is sold or refinanced. Borrowers planning to sell in the near term should factor this into their net proceeds calculation.
Florida-Specific Considerations
For Florida veterans, the stakes of getting this right are unusually high. Property insurance costs across the state have risen sharply in recent years — annual premiums for a single-family home in South Florida or along the Gulf Coast can now run $5,000 to $12,000 or more depending on flood zone designation and construction type. That added carrying cost has contributed to payment stress for a segment of borrowers whose mortgage itself is manageable.
A veteran in the Tampa Bay area who purchased at a low rate but is now absorbing insurance increases, higher HOA costs, and general inflation may be delinquent through no fault of their core financial position. The partial claim option is designed precisely for that profile: someone who can service their mortgage going forward but needs a structured mechanism to handle the accumulated arrearage.
It also matters that Florida’s housing market has not collapsed. As of recent market data, median home values in many Florida metros remain elevated relative to pre-pandemic levels, meaning most VA borrowers still carry meaningful equity. A partial claim that keeps them in the home and preserves that equity is a better outcome for all parties — borrower, servicer, and the VA guarantee fund — than a foreclosure on a property with positive equity.
What to Do Before November
If you are a VA loan holder who has missed payments, is approaching delinquency, or has received loss mitigation outreach from your servicer, take the following steps now:
- Call your servicer’s loss mitigation line directly — not the general customer service queue. Ask specifically about the VA partial claim option and your eligibility.
- Do not ignore written notices. Servicers are required to make contact attempts before initiating foreclosure proceedings. Engaging early preserves options.
- Consult a HUD-approved housing counselor. These services are free and available to homeowners across Florida. They can help you understand which loss mitigation path is appropriate for your situation and negotiate on your behalf if needed.
- Do not assume a forbearance is enough. Forbearance pauses payments but does not resolve them. The partial claim actually restructures the arrearage into a manageable form.
The November deadline creates urgency, but it also creates clarity. Pennymac’s early rollout signals that servicers are being asked to take loss mitigation seriously before the window narrows — and that veterans who engage now have more leverage and more options than those who wait.