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They CANNOT require you to go through a specific lender, however they can/will tie certain negotiable terms to the use of a specific preferred lender. For new construction homes it's a way for them to control the transaction and the peace of mind of knowing that their lender has approved your loan.
This sounds like to me it is not the seller themselves but rather the seller's agent. Yes this is legal basically they countered back to you. I have seen many times where the seller's agent would like for the buyer to be pre-qualified with their preferred Mortgage company. agree with the point made by many others that the seller can't force the buyer to use a specific lender, but the homeowner is under no obligation to accept an offer he/she doesn't like, in the case at hand, an offer which identifies a lender the homeowner doesn't like.