On June 12, 2009, the U.S. Department of Housing and Urban Development (HUD) issued
Mortgagee Letter 2009-19, which outlines changes aimed at streamlining the approval process for FHA financing for condominium projects. In this Mortgagee Letter, HUD announces a new policy and procedure whereby qualifying lenders will be able to determine condominium project eligibility. But there are other important changes in the letter that will apply to both lender-approved and HUD-approved condominium projects, including 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.