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## II. ORIGINATION THROUGH POST-CLOSING/ENDORSEMENT
### C. Condominium Project Approval
#### 2. Project Eligibility
- All engineering or expert reports commissioned by the Condominium Association or their attorneys, which must include evidence of the safety, structural soundness, habitability, or functional use of the Condominium Project and evidence of the cost of the repair of any construction defect and status of the repairs.
##### (E) Legal Restrictions on Conveyance (Free Assumability)
###### (1) Definitions
Legal restrictions on conveyance have the same meaning as defined in 24 CFR § 203.41.
###### (2) Standard
The Condominium Project must not contain Units encumbered by restrictions on conveyance in violation of the requirements contained in 24 CFR § 203.41, subject to certain enumerated exceptions provided below. The Condominium Project’s organizing documents may contain one or more of the following provisions:
- All leases must be in writing and subject to the declaration and bylaws of the Condominium Project.
- The Condominium Association may request and receive a copy of the sublease or rental agreement.
- The Condominium Association may request the name(s) of all tenants including the tenants’ Family Members who will occupy the Unit.
- Unit owners are prohibited from leasing their Units for an initial term of less than 30 Days.
- The Condominium Association may establish a maximum allowable lease term.
- The Condominium Association may establish a maximum number of rental Units within the project; however, the percentage of rental Units may not exceed the current FHA Condominium Project owner-occupancy requirement.
- The Condominium Association may not require that a prospective tenant be approved by the Condominium Association and/or its agent(s), including but not limited to meeting creditworthiness standards.
- The Condominium Association may have the right of first refusal to purchase or lease any Unit only if it does not violate discriminatory conduct prohibitions under the Fair Housing Act regulations at 24 CFR Part 100. It is the responsibility of the submitter to address any questions regarding eligibility issues with their attorney or the appropriate agency.
**Handbook 4000.1**
Last Revised: 01/10/2025
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