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AAFMAA Blog

VA Loans and Power of Attorney

2022-07-01

There are times you just can’t be there in person – such as when you’re serving overseas.

That happened last year to one AAFMAA Member, 32-year-old Seung “Jeremy” Park, who was stationed in Korea but separating from the service and returning stateside.

Park planned to move with his wife into his parents’ large rental home and buy it. He reached out to Beth Dozier, a Military Mortgage Advisor in AMS’s Virginia Beach, Virginia office, for help with securing a VA Loan. He also arranged for his father to have a Power of Attorney (POA) so his father could sign paperwork on his behalf to close the loan.

Related: First-time Buyer Purchase Home While Overseas

POA Basics

A POA is a legal document authorizing one or more individuals to enter into legal agreements and sign legal papers on behalf of another. Most often in home buying, a spouse uses a POA to sign on behalf of the servicemember, but it can be anyone who you trust to make legal decisions for you.

You can file income taxes using a POA, open checking and savings accounts, or sign any other legal document that binds one party to perform certain functions and requires a signature to execute the agreement.

Related: Essential Documents Every Military Family Needs

POAs are commonly used to sign legal documents when the purchaser or co-purchaser is not nearby. The VA doesn’t establish what type of POA can be used or what language it needs to contain – that’s dictated by the state where the property is located and by the lender. Some lenders, in fact, may not accept a broad POA and require having a POA specific to the individual real estate transaction.

“Specific” POAs are drawn up precisely for that real estate transaction, with wording specific to the state in which the property is located. Specific POAs must:

  • Spell out the exact purpose of the POA
  • List the particulars of the transaction such as property address, price, loan amount and closing date

A specific POA limits the authorized signator to the individual transaction and clearly states the intentions of the absent borrower, so if the loan falls out or the deal is canceled, you’ll need to have a new POA issued.

How It Works

At the closing, the authorized signator will sign on the absent borrower’s behalf. If a couple is buying the home, the spouse will sign for both themselves and the absent servicemember.

The signator doesn’t simply write the absent party’s name on the signature line and initial where needed. They write something to the effect of “John Doe on behalf of Jane Doe” where required in addition to the POA.

Getting a POA

If you don’t at least have a general POA, you should get one now, especially if you’re on active duty and if you’re getting close to buying a home and need a real estate-specific POA. Contact your VA lender in advance and let them know that an absent co-borrower may in fact be in your future.

The lender will then walk you through the process to get the correct POA drawn for you once a property is found. It is also important to inform your real estate agent that you plan to use a POA.

We’re Here to Help

Whether you’re just thinking about buying, ready to start home-shopping in earnest, or thinking about refinancing, an AMS Military Mortgage Advisor will be happy to provide you with an honest and fair comparison of your mortgage options, including a wide range of affordable mortgages designed to meet your needs

Ensuring AAFMAA Members obtain the best mortgage possible is our mission. Get your free mortgage assessment today or give us a call at 844-244-0564!