We have provided a loan application to a customer for a home equity loan to put a pool in. We have not received the application back, however, customer was advised by a credit union that he could not put any type of 2nd lien on his property since the VA guaranteed the 1st lien. Is this correct?

CompMan1-

I am not aware of any VA restrictions on obtaining HELOCs/2nd mortgages after the fact. I have seen many refinances over the years (both VA and other) where a VA first and other subordinate liens were paid off at the refi.
However, the customer should review the closing docs from the purchase to determine if there are any.