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Lesson 6.5

Power of Attorney

Samantha Reeves | Real Estate Expert

Types of POA

Power of Attorney (POA) is a familiar concept for many VA buyers. This is a legal tool that allows you to designate someone who can enter into contracts on your behalf.

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.

There are a couple different paths that the VA and lenders can take, and your unique circumstances will likely determine 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 POA

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

Specific POA

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

Alive & Well Statement

Regardless of the type of POA you use, lenders will need to verify that the military member or veteran is alive and, if on active duty, not missing in action.

This “alive and well” statement could be a simple phone call or email to your lending team on the day of closing or a formal letter from a supervisor. Talk with your loan officer about what's needed for your specific situation.

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With Chris Birk,
Author of The Book on VA Loans