Federal Rules Wreak Havoc on Condo Sales

Chicago Tribune (07/30/08); Podmolik, Mary Ellen
Anecdotal evidence from lenders and real estate agents indicates that the credit slump has spurred a three-fold jump in home purchases with FHA-insured mortgages, but experts point out that existing FHA rules make financing a condominium more difficult. Condo buildings must be FHA-approved, which means they must have at least four units and the condo association's declarations of covenants and restrictions cannot include a "right of first refusal" that could hinder the FHA's ability to resell the unit. Many building owners and managers did not seek FHA approval in the last decade because affordable financing and rapid sales made it unnecessary, and those now rushing to obtain approval must wait as long as 10 weeks for the process to be completed.