VA Loans and Power of Attorney

Power of Attorney (POA) is a familiar concept for many VA buyers.

POA is a legal instrument allowing service members to designate a person who can enter into contracts and execute other civil, financial and legal obligations on their behalf - often because of a deployment.

Power of Attorney helps ensure that deployed service members and other veterans who can’t be present to sign documents can still use their VA home loan benefit.

The first thing to know about POA, is that lenders will need to verify the service member or veteran is alive and, if on active duty, not missing in action - often referred to as a VA alive and well statement.

The VA alive and well statement is typically a verbal communication with the borrower on the day of closing, but some lenders may also require a formal letter from a supervisor.

Beyond the alive and well statement, there are a couple different paths the VA and approved lenders take, and your unique circumstances will likely dictate whether you need a General or a Specific POA.

Let’s drill down a bit into those different documents to see which might make the most sense for you.

General Power of Attorney is, well, general in nature. It gives your assigned agent the power to handle a bunch of broad needs on your behalf, from filing taxes and making banking transactions to signing contracts.

There are two scenarios that allow VA buyers to use a General POA.

The first is that buyer is able to sign the initial loan application and the purchase agreement. It doesn’t matter if they’re not able to sign other documents as the loan process moves forward. If they can sign these two early documents, you can use General POA.

The other scenario is the buyer isn’t able to sign those initial documents, but they are able to sign all of the closing documents. This setup also allows buyers to use General POA. In either case, lenders may consider electronic signatures acceptable.

You’ll need to use a Specific POA if the buyer is unable to meet the requirements for a General POA.

Specific POA is also known as limited Power of Attorney. It’s limited because the agent is only allowed to execute on a very specific issue, like, say, a VA home loan for one particular property address.

Lenders may have their own guidelines. At Veterans United, we need a Specific POA with details about the property, the price and some other important information.

In order to move forward with a VA purchase, your Specific POA must contain the following information:

• Purpose: Clearly expressed intent to obtain a loan to purchase a home
• Property Identification: Clear identification of the subject property for the loan transaction
• Price and Terms: Clearly outline the sales price (if applicable), total loan amount and any other relevant terms to the transaction
• Occupancy: Clearly identify the veteran’s intent to occupy the property
• Entitlement: A lender may require clearly expressed intent to use all or a specified amount of entitlement

Military members purchasing while overseas or otherwise relying on Power of Attorney is more common than many people realize. And the VA ensures that deployed service members and other veterans who can't be present to sign documents still have access to this cherished and increasingly powerful benefit.

You can talk with a Veterans United loan specialist about your unique situation at 855-870-8845.