Using Power of Attorney to Purchase a Home With a VA Loan

Although coming up on deployment orders typically happens months before a report no later than the date, it’s inevitable some tasks won’t get done before saying goodbye. Sometimes timing is not quite right for deployment. As a military family, you continue to make plans, but life in the service says otherwise. If you’re a military spouse, you know how hectic planning for deployment and everyday to-dos can be. Pile on a pending home purchase and your nerves will be tested.

Advantages of workoing with a Real Estate Agent

But wait, don’t be discouraged!

You don’t have to put off buying your family’s dream home because of a deployment. You can prepare for unforeseen circumstances by getting a power of attorney (POA). A POA is typically executed during out-processing, and the VA permits the use of a POA for VA loans when buying a house.

What type of POA is needed?

A power of attorney (POA) is a legal document authorizing a person (typically a spouse) to enter into legal transactions, like purchasing a house. POAs allow appointed spouses to sign necessary documents on behalf of the service member and, if you’re in the process of buying a home, initiate mortgage loans.

There are different types of powers of attorney; the two most commonly known are general and special. Typically, during out-processing, a general POA will be executed. A general POA gives broad powers to the designated agent that may include handling finances, purchases, operating business interests or other transactions. The general power of attorney is a useful tool when faced with deployment.

However, a special POA is initiated in specific cases like home purchases, as lending institutions may require specific language to be used and may not accept a general or broad POA.

Special power of attorney used in a real estate transaction provides legal wording specific to the state in which the home is located.

Drawing up a real estate specific POA

When a real estate POA is executed, the POA must:
• Declare the exact purpose
• List the details of the transaction, e.g., property address, purchase price, loan amount and the closing date

In many cases, the real estate attorney or settlement agent/ title company will have their own real estate specific POA, which the VA lender must approve before it can be used.

At the closing, the authorized signatory will sign the documents on behalf of the absent borrower.

Other things to consider

Executing a POA is an important resource for service members and veterans. Here are some other regulations from the VA:
• Appointed agents may apply for a Certificate of Eligibility and start the processing of a VA loan on behalf of the servicemember (or veteran)
• The POA must comply with state laws and regulations
• A clear title must be conveyable in case of a VA loan default

If you and your spouse are facing deployment during the hunt for your home, you should get a real estate specific POA now. Contact your VA lender in advance to let them know about an absent borrower.

If you’re ready to purchase a home using your VA benefits, let our team of experienced VA mortgage professionals show you how easily VA home loans can become a reality, even while facing deployment.

Get started online or contact us to get more information about the VA home loan process and how it may benefit you.

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