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Can a new home builder refuse to allow a VA loan in a new development if they are approved VA/FHA?

They are refusing to allow VA but have ok'd several FHA loans.
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October 19 - Downingtown
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Since it is new construction... VA would require a 1 year builder warrenty or a 10 year insurance backed protection plan.  I am guessing the building is unwilling to provide either.
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October 19
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Since January 2009

And you knew that before Barbara's 2nd post how?

What am I going to say next Swami?
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October 19
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This home is already built.  

Thank you.
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October 19
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Barbara...Is this house right in Downingtown (per the area on the title of the thread)  The reason I ask is that right outside Downingtown to the west qualifies for USDA Rural which is structured similar to the VA loan.  May be an option for you.
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October 19
This home is already built.  Trying to avoid mortgage insurance. 
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October 19
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Tim,

The builder (who is the seller) can choose not to sell to a poential buyer for whatever reason they like.  If the builder does not want to sell to a buyer using VA financing...They don't have to sell to them!  Since the VA requires the builder to pay for all the inspections as well as the interest payments during construction...I can't say that I blame them...What is the point of having the buyer get construction financing if the builder has to pay for it?
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October 19
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I would think that the builder has a right to accept whatever financing they want.

If the builder (seller) was applying for the loan then you're correct; however it is the buyer that is accepting (applying for) the financing. The VA isn't difficult at all; they are looking out for the buyer veteran.
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October 19
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"Perhaps your buyers could utilize FHA with a full 6% credit.  They would only need 3.5% down.  Is there a reason they cannot go in this direction?"

Jennifer,

 I would think that the added mortgage insurance would be a pretty good reason! Anyone qualifying for VA would be an idiot to do an FHA loan, it would literally be giving away money!
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October 19
I would think that the builder has a right to accept whatever financing they want just as a resale homeowner does.  It may have been approved for FHA financing and not VA.  VA can be very difficult to deal with.  Perhaps your buyers could utilize FHA with a full 6% credit.  They would only need 3.5% down.  Is there a reason they cannot go in this direction?
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October 19
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Since January 2009

Here is a link to the VA guidelines....If I was a builder I would avoid them!
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October 19
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Since January 2009

VA requires that the builder pay the interest during construction as well as additional fees.

I don't think the builder has any issues with our vetrans...his issues are with VA construction loans!
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October 19
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It sounds strange that the builder has some kind of problem with our veterans.
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October 19
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That doesn't sound right to me, but I would call the VA and ask them about this particular builders "policy" to know for sure.  Maybe tell the builder that you will be checking with the Veterans Administration yourself.  Sounds a little fishy, most likely it's just that they don't want to deal with VA financing and a VA appraiser, but that doesn't make it right.  Good luck to you!  
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October 19
 

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