MORTGAGE MATTERS

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May 2022

Military Appreciation Month: Closing VA Loans When Deployed

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WHAT YOU'LL LEARN

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Occupancy requirements for VA loans

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How a Power of Attorney can help you

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Why it’s never too late to apply

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WHAT YOU'LL LEARN

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Occupancy requirements for VA loans

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How a Power of Attorney can help you

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Why it’s never too late to apply

After a long homebuying journey, there’s nothing quite like the feeling of closing on your home. But what happens if you’re an active-duty service member? Surely that would complicate the closing process, right?

You might think that being stationed elsewhere will hurt your chances of ever closing on your VA loan in time (or at all, for that matter), but we’re here to tell you that’s not the case! This Military Appreciation Month, we’ve got the inside scoop on how you can close your VA loan while you’re still deployed.

Occupancy Requirements

As you’re aware by now, VA loans can only fund primary residences, meaning borrowers are expected to live in the home after their loan closes. The U.S. Department of Veterans Affairs does not allow the use of VA loans for investment or vacation properties. However, qualified buyers can own two primary residences if they occupy each for at least six months in a year.

Generally, VA loan borrowers have up to 60 days past closing to move into and occupy their new home. The VA refers to this period as “reasonable time” to settle down in your new place post-closing. But if you’re deployed, two months might not be enough time to make your move back home.

VA loans do allow, under certain circumstances, for their borrowers to extend their full-time occupancy date to as much as a year after closing. To earn the extended occupancy date, you must move into your new home in less than 12 months, and you must inform your lender why you cannot occupy your home at that time.

The best examples of those who can gain an extension to their full-time occupancy deadline include:

  • Retiring service members

  • Buyers of property that needs repairs

  • Intermittent-occupancy buyers due to their employment

Of course, spouses of deployed service members can also act as the home’s official occupant to satisfy the 60-day requirement. Similarly, your spouse, or another person of your choosing, can sign the other final closing documents on your behalf while you’re abroad, but if the loan is exclusively in your name, you must first have a limited power of attorney (POA) on file.

Obtaining a Power of Attorney

A limited POA is an authorization that allows another party to carry out any of the legal actions needed for you to complete your loan (“limited” meaning only the loan, not medical or other decisions) while you’re away.

Your POA should authorize a specific person, because if you don't, the builder, lender, or title company may not accept your chosen person’s signature instead of yours. You may also be required to use a specific POA form. The POA must be approved by your lender, and in most cases, it must be signed in the presence of a notary.

If you don’t want to sign a POA, you can still buy a home while you’re deployed if you can sign documents electronically and in person with a notary in the area where you’re deployed. You may find a notary on your military base or at the U.S. Consulate if you’re in a foreign country.

You Can Still Apply, Too!

And for those deployed who haven’t applied for a VA loan yet, but are interested in doing so, it’s not too late! The VA loan is a mortgage program available to active and retired military, reservists, and surviving spouses. These loans offer up to 100% financing with flexible qualifying criteria and favorable loan terms.

With no monthly mortgage insurance and renovation loan options available, the VA loan program is perfect for borrowers or spouses who are finally ready to settle down after completing their service. Reach out to an Atlantic Bay Mortgage Banker today to see if you qualify, and for further reading on VA loans, explore other articles in the Knowledge Center!