Tips & Special Topics
Power of Attorney for VA Loans
Added March 30, 2010
A power of attorney (POA) is authorization for someone to act in another person’s behalf in legal or business matters. An individual with POA in a VA loan transaction can act on behalf of a borrower who is unable to be present during the loan closing. The U.S. Department of Veterans Affairs has advised its field stations to show sensitivity and flexibility for military members deployed overseas using a POA in VA mortgage transactions.
Often, spouses of active duty military member serving overseas use a POA when obtaining a VA loan. A military spouse is typically in communication via Skype or email on a regular basis and usually knows the intent of the military member when it comes to using the VA home loan benefit.
Once a military member decides to purchase a home using his or her VA home loan entitlement, a specific POA can be assigned. The VA borrower designates an attorney-in-fact to act on his or her behalf. The VA will allow a VA borrower to use an attorney-in-fact to execute any documents necessary to obtain a VA guaranteed loan. This enables active duty servicepersons stationed overseas, and veterans who cannot be present to execute loan documents, to obtain VA loans.
The attorney-in-fact provides proof that the borrower is aware of the mortgage transaction that will result in a mortgage obligation and use of VA home loan entitlement. The individual acting with a POA in a VA loan transaction should retain a copy of any written correspondence from the borrower indicating his or her intent to use entitlement for a VA home loan.
The military member’s attorney-in-fact may apply for a Certificate of Eligibility and initiate processing of a loan.
To complete the loan transaction using an attorney-in-fact, the VA also requires a military member’s written consent to the specifics of the transaction. This requirement can be satisfied by either:
• the borrower’s signature on both the sales contract and the loan application, as long as the borrower’s intention to obtain a VA loan on the particular property is expressed somewhere in those documents, or
• a specific power of attorney or other document(s) signed by the borrower, which encompasses entitlement, purpose, property identification, price and terms, and occupancy.
Certain additional written certifications are required regarding the borrower’s military status. If the VA has information that the prospective borrower is MIA or deceased, VA will not issue a commitment.
In order for a VA borrower to use a POA, the lender must ensure that the POA complies with state law in respect to title and the mortgage‘s legal enforceability in that jurisdiction.
Spouses of veterans and active duty members can learn more about utilizing power of attorney on a VA mortgage transaction by contacting a VA Loan Professional.
