The "Veterans Housing Stability Act of 2025" introduces significant changes to the administration of Department of Veterans Affairs (VA) housing loans, primarily to prevent and resolve defaults. It establishes a new Partial Claim Program , allowing the Secretary of Veterans Affairs to purchase a portion of a veteran's loan indebtedness when a loan is in default or facing imminent default. Under this program, the Secretary pays the loan holder, and the veteran agrees to repay the Secretary the purchased amount, without interest, at the loan's maturity, with the Secretary securing a subordinate interest in the property. The partial claim amount is generally limited to 25% of the unpaid principal balance , though this cap can be raised to 30% for specific delinquent individuals or in areas affected by major disasters. Importantly, any payment made through this program must first be applied to arrearages, including additional costs like taxes or insurance, and no administrative expenses can be charged to the veteran. The bill also grants the Secretary broad discretion in administering the program, including requiring loan holders to service these partial claims and compensating them for their efforts. To ensure compliance and accountability, the legislation introduces civil penalties for loan holders who knowingly make false statements related to these default prevention programs. These penalties can be substantial, reaching up to twice the loss suffered by the Secretary or a maximum of $27,894. Additionally, the bill amends existing default procedures, clarifying the Secretary's authority to make payments to avert foreclosure and requiring loan holders to place loans in forbearance when appropriate. A key provision mandates the Secretary to prescribe comprehensive loss mitigation procedures , including a mandatory sequence for offering various options to veterans to prevent foreclosure. Finally, the bill strongly encourages a temporary moratorium on foreclosures of VA-guaranteed loans until the new Partial Claim Program is fully operational, aiming to provide immediate relief while the new system is implemented.