Can a builder require that you use their preferred lender?

I have been pre-approved for a home loan through my builder’s preferred lender,
however, I have also been approved for a loan from another lender offering a much
lower interest rate. My builder is stating that if I do not go with his preferred
lender, I can not purchase a home in his community. Is this legally true? If not,
what can I do to insure that I am able to use my own lender?

Asked on August 27, 2018 under Real Estate Law, Georgia


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

The fact is that a builder may impose restrictions on purchasing a house from them, absent some form of legally actionable discrimination (i.e. based on race, religion, nationality, etc). If such a restriction is not acceptable to you, then they can refuse to sell yo you.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

It is legal in that there is no law requiring a builder to sell homes to any particular person, and no right or guaranty to be able to buy a home from a given builder. A builder may put conditions on purchasing a home from them, such as that you have to use their lender. If you don't comply with their conditions, they do not have to sell to you.

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