Here in Oak Park Illinois, we have hundreds of condominiums for sale. Many buyers who are in the market now cannot get a conventional loan due to credit scores or lack of down payment, or both. They are qualified for an FHA loan however. To buy a condominium with an FHA loan, the complex has to be approved by FHA or be able to get a "spot" approval from FHA for the particular unit. If the condominium declaration and by-laws contain a "right of first refusal" clause (which allows the condominium association to purchase a unit for the same agreed upon price and terms as the prospective buyer) FHA will not approve the complex. It is looked upon as a discriminatory clause. The clause is rarely used and in order to compete with units for sale that ARE approved by FHA, condo associations may want to contemplate talking to their association attorney or management company about steps to remove the clause from their declaration.
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