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Q: “I represent a buyer using VA financing. We recently submitted an offer on a home that received multiple offers. I just learned that the seller selected an offer from a buyer with a conventional loan with a lower purchase price than my buyer’s offer. Is this a fair housing violation because the seller discriminated based on source of funds?”

A: Virginia Fair Housing law prohibits discrimination in the sale of real property based on source of funds. Yet, pursuant to guidance provided by the Virginia Real Estate Board, this does not prevent a seller from considering the loan amount, loan program, or type of loan when choosing an offer to accept, so long as it is done in a non-discriminatory manner.  

There may be multiple reasons why a seller chooses the terms of one offer over another. The offer accepted by the seller may have had a larger down payment, a larger earnest money deposit, or a no appraisal contingency. These are just some of the factors that could be considered by a seller when analyzing multiple offers.  

Other factors may motivate a seller to choose one offer over another, including the urgency with which the seller needs to move. If a lower price offer contains no contingencies and a faster settlement date, such conditions can be valid reasons to choose a lower price offer to accept. These are just some possible examples of non-discriminatory reasons to select an offer that contains one loan type over another.  

On the other hand, if a seller states that he or she will not even entertain an offer with VA financing, then that would be discrimination based on source of funds.

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