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Home Loans

How to Apply for Nonsupervised Automatic Authority

Procedures for Application

Submit a completed VA Form 26-8736, Application for Authority to Close Loan on an Automatic Basis-Nonsupervised Lenders, to the VA Regional Loan Center with jurisdiction over your home office. The necessary forms needed to apply for automatic authority can be obtained from the VA Regional Loan Center site.

Criteria That Must be Met to Qualify for Automatic Authority

Lender Experience

  • Your company must have at least 2 years active VA origination experience and have originated and closed at least 10 VA loans (properly documented and submitted) within the past 2 years, or
  • Your company (with less than 2 years active VA origination experience) must have originated and closed at least 25 VA loans (properly documented and submitted), or
  • Each principal officer (president of vice president) who is actively involved in managing origination functions must have at least 2 recent years management in the origination of VA loans, or
  • Your company, acting as an agent for an automatic lender(s) must have originated at least 10 VA loans over the past 2 years - or 25 VA loans if less than 2 years.

Underwriter Experience

A senior officer of your company must nominate, on VA Form 26-8736a Nonsupervised Lender's Nomination and Recommendation of Credit Underwriter, at least one full-time qualified employee to act as an underwriter who has either:

  • 3 years experience in processing, pre-underwriting or underwriting mortgage loans. At least 1 year of the most recent 3 years must have included making underwriting decision on VA loans, or
  • Certified Residential Underwriter (CRU) designation from the Mortgage Bankers Association (MBA).

All VA-approved underwriters must be familiar with VA's credit underwriting standards and the VA Lenders Handbook.

Minimum Working Capital or Net Worth

A lender must maintain, either:

  • A minimum of $50,000 working capital, or
  • A minimum of $250,000 in adjusted net worth.

Lines of Credit

A lender must have one or more unrestricted lines of credit totaling at least $1 million.

Permanent Investors

If a lender customarily sells loans it originates, it must have a minimum of 2 permanent investors.

Quality Control Plan

The lender must implement a written quality control plan which ensures compliance with VA requirements and meets the criteria outlined in the VA Lenders Handbook.

Liaison

The lender must designate one qualified employee and an alternative to be the primary liaison with VA. The liaison officers should be thoroughly familiar with the lender's entire operation and be able to respond to any query from VA concerning a particular loan or the firm's automatic authority.

Sanctions for Prior Acts

There must be no factors indicating the lender would not exercise the necessary care and diligence.

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