August 13, 2013
A reader asks, “Can I use an AIF to apply for a mortgage loan in my absence? Namely fill out entirely on his own and sign the Uniform Residential Loan Application?”
We’re assuming by using the acronym “AIF” the reader means “attorney in fact”. A search of the FHA loan rules in HUD 4155.1 reveals nothing specifically about using an attorney in fact, but FHA loan rules that cover who is permitted to sign the documents committing a borrower to the FHA loan are very clear.
Chapter One, Section B of HUD 4155.1 states: “All borrowers applying for the mortgage and assuming responsibility for the debt must sign Fannie Mae Form 1003, Uniform Residential Loan Application (URLA), and all addenda. Either the initial loan application or the final, if one is used, must contain the signatures of all borrowers.”
That would preclude the use of an attorney in fact as described in the reader question. Furthermore, FHA loan rules in Chapter One also say, “The initial mortgage loan application may not be executed by using a power of attorney, except in circumstances as indicated…”
What are those circumstances? FHA loan rules provide exceptions only in cases of incapacitated borrowers and military members. When it comes to an incapacitated borrower, the rules in Chapter One say “A power of attorney may be used for incapacitated borrowers who are unable to sign the mortgage application. The lender must provide evidence that the signer has authority to encumber the property and to obligate the borrower.”
“Acceptable evidence includes a durable power of attorney specifically designed to survive incapacity and avoid the need for court proceedings. The incapacitated individual must occupy the property to be insured, except if it is an eligible investment property.”
For military members, “A power of attorney may be used for military personnel on overseas duty or on an unaccompanied tour. The lender should obtain the absent borrower’s signature on the application by mail or via fax.”
For more information on these exceptions, contact the FHA directly.
Do you have questions about FHA home loans? Ask us in the comments section.
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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