The U.S. Department of Housing and Urban Development (HUD) issued a release which outlines upcoming changes designed to streamline the approval process for FHA financing for condominium projects.
Most notably, there is a provision stating, “Right of first refusal is permitted unless it violates discriminatory conduct under the Fair Housing Act regulation in 24 CFR 100”, essentially lifting HUD’s long-standing policy of denying all condominium projects with a right of first refusal provision.
So, what does that mean to you, the consumer? It means that more of the condo buildings that contained the right of first refusal clause in their bylaws, that were previously nearly impossible for a consumer to purchase using an FHA loan, will now be eligible for FHA loans.
The changes are set to be effective October 1, 2009.
You can read the entire release here.
Unfortunately, the implementation of this change was delayed until November 2. Of course, there is the risk that there will be more delays. This puts a lot of condos in limbo because they have to be asking themselves if they should go through the trouble and legal expense of eliminating something that is going to be moot in a few weeks – maybe.