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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.

VA Rules Against Discrimination by Lenders

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.

VA Rules Against Discrimination by Sellers

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.”