Illinois Condominium Property Act and FHA Financing
The Department of Housing and Urban Development (HUD) did not allow FHA financing for condominiums which were part of an association that had a “right of first refusal” in their condominium declaration. Effective November 2, 2009, however, HUD will allow FHA financing for condominiums in associations that have a right of first refusal on their books, so long as the association otherwise meets HUD’s eligibility requirements.
In order to assist potential buyers of such condominiums, the Illinois legislature has amended the Illinois Condominium Property Act to clearly state that no association may exercise its right of first refusal just because the buyer is obtaining FHA financing. These new laws are, of course, good news for many condominium buyers who seek to take advantage of the FHA’s low down payment requirements!