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.

VA Alive and Well Statement

Lenders need to verify the service member or Veteran is alive and, if on active duty, not missing in action. This is commonly known as a VA alive and well statement.

This process is necessary to obtain a VA loan through power of attorney.

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.

VA Loan Power of Attorney Types and Requirements

Beyond the alive and well statement, there are two types of power of attorney commonly used by the VA and approved lenders when Veterans want to use VA benefits without being physically present.

Your unique circumstances will likely dictate whether you need a General POA or a Specific POA.

General Power of Attorney

General Power of Attorney is, well, general in nature. It gives your assigned agent the power to handle many 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:

1. The Veteran buyer is able to sign the initial loan application and the purchase agreement.

It doesn’t matter if they can’t sign other documents as the loan process moves forward. If they can sign these two early documents, you can use General POA.

2. The Veteran buyer isn’t able to sign those initial documents, but they can sign all of the closing documents.

In either case, some lenders may accept electronic signatures.

Specific Power of Attorney

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, such as a VA home loan for one particular property address.

At Veterans United, 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

Other lenders may have their own guidelines regarding VA loans and Specific POA.

Military members purchasing while overseas or otherwise relying on Power of Attorney is more common than many people realize. 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 valuable benefit.

You can discuss your unique situation with a VA home loan expert at 855-870-8845.