Written by Isaac F. Davis

Authorization for someone to act in another person’s behalf in legal or business matters is called Power of Attorney (POA).  In a VA loan transaction, a Power of Attorney (POA) can be used to protect a VA-eligible borrower who is unable to attend a real estate closing. Proper use of VA home loan entitlement, mortgage obligation, borrower’s knowledge of the real estate transaction and use of the VA home loan entitlement are just some of the things a POA can speak for in the veteran’s stead. VA field stations are aware and sensitive to the need for POAs in VA mortgage transactions for military members deployed overseas.   

Often a spouse is the specific POA assigned once a military member decides to purchase a home with his or her VA home loan entitlement.  Spouses are typically suitable POAs because they are often in communication via Skype and email with their servicepersons on a regular basis and usually know the intent of their VA-eligible borrowers when it comes to using VA home loan benefits.  Copies of any written correspondence between the spouse acting as POA and the military member regarding the intent of use of VA loan entitlement should be retained.

The VA permits a veteran to utilize an attorney-in-fact whenever VA guaranteed documents are required to obtain a VA guaranteed loan.  Active duty personnel serving overseas, and any other veterans who cannot be present to execute their VA home loan documents, can still obtain VA loans.

Military spouses as POAs may also be helpful in obtaining a Certificate of Eligibility – the document necessary to initiate processing of a VA loan. 

A POA who wishes to complete a VA loan transaction on behalf of a spouse may be required to present a veteran’s written consent specifying a spouse as POA of any future correspondence regarding the VA loan transaction. This requirement if often met by either:

• Veteran signing both the real estate purchase agreement and the VA loan application, as long as the VA-eligible borrower is intent on obtaining a VA loan for a particular property, or
• Specific POA document is signed by the veteran and encompasses entitlement, purpose, property identification, price and terms, and occupancy.

 

There may be some additional written documentation required when using a spouse as POA like the veteran’s military status and whether he or she is alive during the loan closing, on active duty or missing in action. If the VA determines that the veteran is MIA or deceased, it will not issue a commitment to honor a VA loan transaction initiated by a spouse as POA.

The VA-approved lender must ensure that the POA complies with state law in respect to:

• The mortgage being enforced in its jurisdiction, and
• Clear title being conveyed should a property go into foreclosure

 

For more information about military spouses as POA on a VA mortgage transaction, contact a VA Loan Professional.