FHA Loans for Condos and the First Right of Refusal

By
Real Estate Agent with William RAVEIS Realty

I have an accepted offer on a condo for my buyers. They will be using FHA financing and we just found out from the mortgage broker that if the condo has first right of refusal written in the bylaws that the FHA loan will not be approved. Has anyone had any experience with this in the past and if so, any loop holes you cans hare would be greatly appreciated!

Comments (2)

Chris Canfield
Coldwell Banker Residential Brokerage - Tucson, AZ
Homes for Sale in Oro Valley and Tucson, Arizona

Hi Diane and Bob,

I am working with such a problem right now; the mortgage company was able to get a "spot approval" for an FHA mortgage, but now four days before commitment date, the mortgage company is told that FHA won't approve the mortgage because of the First Right of Refusal.  I see your post is from more than two months ago--any advice you can offer me?

Chris K. Canfield

Jun 11, 2009 02:21 AM
Diane & Bob Arenholz
William RAVEIS Realty - Yorktown Heights, NY
Covering all of Westchester County, NY

Chris,

Unfortunately I don't have the good news you are looking for. As far as I know, unless the condo board waives the first right of refusal or modifies their bylaws your buyers will be unable to use an FHA. An additional issue of not being able to use an FHA loan is they will not be eligible for the tax credit either. I wish you the best of luck.  If you are able to hold the deal together we would love to hear about it!!  Maybe we will both become FHA/First Right of Refusal experts!!

Jun 12, 2009 01:52 PM