VA requirements

VA Loan Anti-Discrimination Requirements

January 8, 2019

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VA Loan Anti-Discrimination Requirements

One of the most important aspects of a VA home loan, financial considerations aside, is the Department of Veterans Affairs regulations covering fair housing. There are extensive rules and guidelines published by the VA to prevent any veteran from being discriminated against when it is time to find and purchase a home.

No VA-approved lender may discriminate against a buyer. This includes situations where the VA loan applicant is temporarily disabled, pregnant or falls into another category that affects the borrower’s income temporarily but does not affect the overall employment status or viability of the borrower as a good credit risk.

No seller can refuse to offer a property on a discriminatory basis–the seller is required to comply with Fair Housing Act laws. According to the VA official site, part of the VA mission is to  “ensure that all veterans are given an equal opportunity to buy homes with VA assistance, without regard to their race, color, religion, sex, handicap, familial status or national origin.” The VA investigates claims of housing discrimination and takes them very seriously.

But the VA also has rules for the borrower in this regard. It’s not a one-way street.

According to Department of Veterans Affairs regulations, the veteran must certify in writing that “neither the veteran, nor anyone authorized to act for the veteran, will refuse to sell or rent, after the making of a bona fide offer, or refuse to negotiate for the sale or rental of, or otherwise make unavailable or deny the dwelling or property covered by this loan to any person because of race, color, religion, sex, handicap, familial status, or national origin…”

If and when a veteran decides to sell the property they originally bought with a VA mortgage, or refinance the home and later rent it out, they too are obligated to comply with VA regulations and Fair Housing laws. Those with VA loans obligate themselves under contract to comply, and the consequences for breaking these rules are steep.

“The veteran recognizes that any restrictive covenant on the property relating to race, color, religion, sex, handicap, familial status, or national origin is illegal and void and any such covenant is specifically disclaimed…” That’s according to the Electronic Code of Federal Regulations, Title 38: Pensions, Bonuses, and Veterans’ Relief, which also adds:

“The veteran understands that civil action for preventive relief may be brought by the Attorney General of the United States in any appropriate U.S. district court against any person responsible for a violation of the applicable law.”

8 Comments
  1. Phillip Suttle

    So a seller has refused to sell us a house because the loan would be a VA loan. Illeagle or what?

    • Joe Wallace

      Have you contacted the Department of Veterans Affairs directly for advice? Call 1-800-827-1000.

  2. kenny

    i feel like i have been misinformed by loan officers the first time they said my certificate of eligiblity was expired and we lost the house due to lon officer saying they had to request another one then we tried for a second property where they said even though i had a full time job that i had to get a second job to help get the house and i make plenty on one job to take care of buisness and there were 2 things on my credit that showed up and i knew they werent mine and until i was able to do that the house deal wasnt moving i got them removed and even got another 2nd job and but that wasnt good enough ...and that loan officer said my credit was fine but i needed a 2nd job which i got but then he left the company all of a sudden without notice to me so the deal fell through then we tried for a 3rd place and this loan officer told me i had to get 2 things on my report fixed one wasnt mine again and the other was a medical bill but that one i took care of and had proof of it and she said it had to b completly removed from my credit before we could proceed then she said i had to get a credit card to help my credit because the 2 cars i paid off with excellent payments wasnt gonna help with establishing credit ...i feel like someone just doesnt want me to have a home of my own ...i wish someone could help explain this all to me ...

    • Joe Wallace

      Contact the VA directly for assistance with your situation by calling 1-800 827-1000.

  3. Joe

    Joe, a couple recently put an offer in on a home and it said VA financing. The offer was countered by the seller and accepted by the buyers. The buyers completed their side of the contract and in doing so put in 100% financing on the balance due line. The seller responded with a refusal to accept based on his position that no one deserves 100% financing. The buyers then changed to FHA and now the home has come in 20k less. The buyers believe that they have been discriminated against and had the seller allowed the VA financing they may have been able to help bridge the gap caused by the appraisal. Do you think this may qualify as discrimination? PS There is literally no inventory as the hedge funds and private equity groups are gobbling up everything in sight.

    • Joe Wallace

      This is a question best answered by the VA directly--I would advise contacting the VA directly at 1-800 827-1000 for further assistance.

  4. Steve

    Can a home seller require the buyer to be a veteran or a close family member of a veteran? Steve

    • Joe Wallace

      That situation may, depending on circumstances, be governed by Fair Housing laws. Contact the Department of Housing and Urban Development directly, you can also learn more about housing discrimination and filing complaints at http://portal.hud.gov/hudportal/HUD?src=/topics/housing_discrimination

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