source:
  type: guide
  id: va-m26-7-ch01-t01
  authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 1, Topic 1 — Definitions
    and Authorities
  description: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 1, Topic 1 — Definitions
    and Authorities.
  coverage_tier: operative
obligations:
- id: va-m26-7-ch01-t01-full
  canonical_id: va-m26-7-ch01-t01-full
  section: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 1, Topic 1 — Definitions
    and Authorities
  type: do
  tags:
  - regulator-direct
  - va
  - va-handbook
  - corpus-expansion
  - tier-operative
  primary_source:
    tier: 1
    authority: VA Lenders Handbook (VA Pamphlet 26-7), Chapter 1, Topic 1 — Definitions
      and Authorities
    source_class: va-handbook
    source_url: https://www.benefits.va.gov/warms/pam26_7.asp
    snapshot_id: b4bc25cdd49513a7
    fetched_at: '2026-05-23T01:53:52Z'
    content_hash: sha256:2516e061c3a90ce65e72b43ae4022a97e784d65ec7580998c523b5dc69ba6520
    paragraph_quote: '1. Definitions and Authorities Change Date February 1, 2019
      • This chapter has been revised in its entirety. a. Lender Any person or entity
      (private sector or government) that originates, holds, services, funds, buys,
      sells or otherwise transfers a loan guaranteed by VA. b. Supervised Lender A
      lender that is subject to mandatory periodic examination and supervision by
      an agency of the United States or of any State or territory, including the District
      of Columbia. VA determines whether the level of examination and supervision
      to which a lender is subject satisfies the requirement. Examples of supervised
      lenders include: • Financial institutions which are members of the Federal Reserve
      System, • Financial institutions whose accounts are insured by the Federal Deposit
      Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA),
      • Financial institutions which are members of the Office of Thrift Supervision,
      • Federal Savings Banks, • National Banks, • Farm Credit System Institutions,
      • State Chartered Banks, • Insurance Companies, • Credit Unions, • Savings and
      Loan Associations, and • Private banks. A state acting as a lender is also considered
      supervised. Continued on next page VA Pamphlet 26-7, Revised Chapter 1: Lender
      Approval Guidelines 1-3 1. Definitions and Authorities, continued c. Non- supervised
      Lender Any lender that is not a supervised lender. d. Non- supervised Automatic
      Lender A lender who has applied for authority to close loans on an automatic
      basis and has been formally granted such authority by VA. e. Agent An Agent
      may also be referred to as a Mortgage Broker. An Agent is a person or entity
      that performs any activity on behalf of, or in the name of, a sponsoring lender.
      f. Sponsoring Lender A lender that uses an agent to perform any portion of the
      work involved in originating and closing a VA-guaranteed loan is the “sponsoring
      lender” for that agent. g. Mergers and Acquisitions Lender mergers and acquisitions
      are discussed in section 8 of this chapter. h. Prior Approval A Prior Approval
      lender is neither a supervised or non-supervised automatic lender. All prior
      approval loans must be submitted to VA for underwriting and approval prior to
      closing the loan. All lenders, whether or not they have automatic authority,
      must submit the following types of loans to VA for prior approval: • Joint loans
      (Veteran/Veteran or Veteran/non-Veteran). • Loans to Veterans in receipt of
      VA nonservice-connected pension. • Loans to Veterans with a VA appointed fiduciary.
      • Interest Rate Reduction Refinancing Loans (IRRRLs) made to refinance delinquent
      VA loans. • Manufactured home loans (except when the manufactured home is permanently
      affixed to the lot and considered real estate under state law) unless the lender
      has been separately approved for this purpose. • Unsecured loans or loans secured
      by less than a first lien. Continued on next page VA Pamphlet 26-7, Revised
      Chapter 1: Lender Approval Guidelines 1-4 1. Definitions and Authorities, continued
      h. Prior Approval, continued Lenders with automatic authority may also elect
      to submit a loan (of a type not on the above list) for prior approval when issues
      or circumstances cannot be resolved by the lender’s own underwriting staff (see
      section 5 of Current Issues). • The submission must include the underwriter’s
      analysis and explanation of why it is being submitted for prior approval. •
      Do not use this provision to shift the burden of a loan rejection to VA. Lenders
      without automatic authority must submit all loans to VA for prior approval except
      IRRRLs made to refinance VA loans that are not delinquent. i. Automatic Authority
      (Authority to Close Loans on an Automatic Basis) Automatic authority is authority
      for a lender to close VA-guaranteed loans without the prior approval of VA.
      Lenders with automatic authority should use it to the maximum extent possible.
      The following lenders have automatic authority: • all supervised lenders, •
      certain non-supervised lenders who apply for and are granted automatic authority
      by VA, and • any lender (even a lender who does not otherwise have automatic
      authority) for the limited purpose of closing an IRRRL, as long as the loan
      being refinanced is not delinquent. Continued on next page VA Pamphlet 26-7,
      Revised Chapter 1: Lender Approval Guidelines 1-5 1. Definitions and Authorities,
      continued j. Supervised Versus Non- supervised Automatic Lenders A non-supervised
      lender that wishes to close loans on an automatic basis must obtain both VA
      authorization for automatic authority and obtain VA approval of other elements
      of its automatic lending operations (that is, underwriter approval). This difference
      between supervised and non-supervised lenders is outlined below. Authority Supervised
      Lender Non-supervised Automatic Lender To close loans on the automatic basis
      No VA approval needed. Must submit application and be authorized by VA to close
      loans on an automatic basis. To use certain underwriters No VA approval needed.
      Any of the lender’s underwriters may underwrite loans processed on the automatic
      basis. Must submit application and obtain VA approval for each person to underwrite
      VA loans processed on the automatic basis. To close loans in particular states
      No VA approval needed. Lender may close loans in any state. No VA approval needed.
      Lender may close loans in any state. To use agents to process VA loans Must
      submit request and obtain VA recognition of each agent with whom the lender
      has an ongoing relationship. Must submit request and obtain VA recognition of
      each agent with whom the lender has an ongoing relationship. k. IRRRL Exception
      IRRRLs, except those intended to refinance delinquent VA loans, can be closed
      automatically by any lender in any state without specific approval of automatic
      authority, underwriters, or the state in which the loan is made. Use of agents
      to process IRRRLs is subject to the same requirements as agents processing other
      types of loans (see Topic 7 of this chapter). VA Pamphlet 26-7, Revised Chapter
      1: Lender Approval Guidelines 1-6'
  judgment: false
