​ONE BLOCK TO THE BEACH on a quiet dead-end street. Approx 1 mile to Destin,
1 block to Pompano Joe's. Proven profitability $34k Rental Income w/some owner-usage. Low monthly HOA! ($400/mo)Healthy HOA! Upgrades 2022:
New LVP flooring! New paint, ALL appliances, (refrig, stove/oven, dishwasher, washer/dryer, microwave), 65'' & 55'' TVs. Fully renovated kitchen! New Backsplash, shiplap, cabinets and ceiling. Bathroom new vanity cabinet & mirror. Stunning decor! Furniture and decor purchased in 2022. All furnishings convey! Currently Active AirBnB with fantastic reviews 4.96/5 stars!! Seller willing to work with Buyer to convey any bookings. Surf Song Condos enjoy Swimming Pool for 16 units. Bldg exterior painted Spring 2023. Short-term rentals allowed. Pets allowed for Owners Only.

​Click here for more information 

                    Sandestin Real Estate and Miramar Beach Real Estate 
                                                Condo's & Town Homes 
 
                                                 Destin Real Estate
                                              Condo's & Town Homes 
 
                            30A Real Estate and South Walton County Real Estate 
                                               Condo's & Town Homes

Old Bay Condo - Destin, FL  32541

2 bed / 2 bath luxury condo in mid-Destin for under $200k!
~No short-term rentals
Only 18 units total in this 3 level low-rise quality-built condominium.

Call for your private showing today!
Share this link with anyone you may know looking in Destin for a primary residence or second home.

Thank you for your interest.
Gena Bolton
Realtor, GRI, CLHMS
251-366-0423
The Premier Property Group
email:  Gena@SoWal30a.com

​Financing Condos and Condotels in Destin, Miramar Beach and Santa Rosa Beach, Florida are very different because of the resort like qualities that most of our condominium complexes have along the Emerald Coast.

As we have noted in earlier post, choosing the right agent is very import when listing your condo for sale. As much as we all would like to have cash buyers when we sale our condo, we know that’s not the reality. The market and economy is bringing more buyers into our area and financing is growing to be a larger part of these transactions.  This is good for sellers because with more buyers we should see increase of property values. As noted before if you are going to accept an offer and take your condo off the market, you as a seller have a right to know who is doing the financing. We hear the story all too often of sellers accepting offers and to find out a few weeks later the buyer can’t get it financed with their bank or lender and seller then looses those days on the market.  A seller chooses a condo specialist and much of this can be avoided.
 
Same thought also applies to buyers as well. Choose an agent who knows condos! Someone who understands that if you want to finance then focus on what is available to you. This includes upfront having the discussion about what your goals are in purchasing a condo, what kind, max price, income generated, and how much you can put down. (Very important as the financing changes with down payment.)  Just the other day I got a call from a frustrated buyer who had been working with another agent. The agent was very nice and seems like a good fit in the beginning but as they got into looking and making offers they became very frustrated with the process. See, the agent showed them many units in their price range and got them very excited but never asked them if they were financing and if so how much are you putting down (down payment). The agent showed them condos in 300k price range as asked by the buyers.  But failed to know they were only able to put down 10%.  Many of the condos that the agent showed (and got the buyer excited about) required 30% down or 60k more in down payment! Unfortunately this was unrealized until offer time. What a waste of the buyer’s time with them being here for only a week. 

How even a strong borrower gets denied.
Financing condominiums along Florida’s Gulf Coast can be a very tricky process. The difference in financing a condominium compared to single family homes is that lenders are required to get the property approved in addition to merely approving the borrower. This is the main reason that I would NEVER recommend that a buyer use an out-of-town lender when financing a condo in Destin and the surrounding area. Lenders that are not located in this market are not familiar with our properties.  Many of them have very unique characteristics which can make them difficult to get approved.  Most out of state lenders are not familiar with these nuances. It is important to note that a loan can be denied because the condo is not approved no matter how strong a borrower is with credit/income.  Even if the borrower has a top-tier credit score, high down payment, and low debt ratio, a lender will still deny the loan if they determine that the condo building has certain characteristics.

       Condo or Condotel?

There are many reasons why a lender could deny a condo for financing. Here are a few:

• The (HOA) may not allocate enough of their annual revenues to a reserve fund. (This is a big one)
• The HOA may not carry adequate insurance coverage. (This can be fixed if HOA is willing)
• There is too large of a percentage of investors as opposed to homeowners. ( If owner Occupied or 2nd Home this no longer is a issue) 
• Too many unit owners may be delinquent on their monthly HOA dues.
• Condotel classification – The most common reason that I see a condo denied is that the out-of-market lender has classified the project as a “condotel”  (Fannie has it on its un-available)

A condotel is condo that has many of the characteristics that are found in a traditional hotel, such as: availability of nightly rentals, daily maid service, registration services, central phone system, and resort-like amenities. 

Loan Denials Late in the Process!!!
Many out-of-state lenders will not determine until several weeks into the process that the project does not meet their requirements. When this happens they deny the loan.  Sometimes these denials come in the 11th hour of the loan process.  This denial often happens after the lender has had the HOA complete a condo questionnaire; and this often happens after the borrower has paid for an appraisal and/or inspection quite often, these lenders will deny a building when a local lender could have actually approved the condo for conventional financing. Federal lending guidelines thru Fannie Mae and/or Freddie Mac do not necessarily classify a condo as a condotel simply because the project offers nightly rentals—but many out of town lenders will tell a borrower they cannot proceed with their loan as soon as this fact is uncovered! Generally, a local condo lender can or already has reviewed the condo project, to determine that the out-of-market lender is incorrectly classifying the condo project as a condotel.  When this happens, the buyer is able to obtain a regular, conventional loan. This means better interest rates and terms too.
Lastly, most out-of-town lenders are not going to have a condotel loan program available in the event that the condo is accurately classified as a condotel. With many of the local condo lenders, they do offer condotel financing if the building is indeed a true condotel.
 
 
Call me and I will happily discuss your goals and needs and see if our team of condo specialists can help you find that perfect condo!!!

Fannie Mae is the true standard to which lenders are underwriting too; even the jumbo lenders are following the Fannie guide for the classification.  Today there are three classifications for condos they are “warrantable”, “non-warrantable” and “condotels”.  

A warrantable project is simple, it just infers that it meets the guidelines for Fannie Mae and therefore suitable for their financing.   This is a fairly simple process for lenders to quickly let you know. They will ask for the HOA to fill out a Condo questionnaire, and they will ask for a copy of the budget (reserves are an important line item -10% required) a current balance sheet, copy of the full property insurance and liability policy.  

 But the question I been asked is why does this approval vary where one will say this complex is approved and another will say it’s a condo-tel.  
When looking a project/complex, look to see is there a rental desk on site, does the HOA participate and/or earns money from rental of the individual units.  These are traits of a condotel.  We do have lenders who lend on condotels and it’s on a loan by loan bases. Even for jumbo loans up 80% for second homes.

Although some of the condominium property requirements may appear arbitrary, the rules exist to protect both the borrower and the lender. Rules are different for small properties (two to four units) versus large properties; there are different rules for new construction and new conversions and the rules can change with jumbo loans versus conventional financing of 417k or under.

Lenders want a high level of owner occupancy in all condo associations. Owner occupants/second homes are considered more likely to maintain their property, pay all fees on time, and manage assessments or fee increases if required. Statistically, investor owners will stop paying their fees and even the mortgage if their personal finances get snarled, which can weaken a condo association.

Additionally the lender needs to verify that all condo fees are collected and up to date, no more than 15% of the total units can be past due on their condo fees.

They will verify that there are no pending law suits against the association that are not covered by the master insurance policy or any other issues that could negatively impact the condominium finances.

When lenders receive the appraisal, they look for few more items, zoning, is it in compliance, flood zone, does the numbers listed by the appraiser match questionnaire given by the HOA.  Looking to see does the HOA have full ownership of the facilities.

 Also many lenders offer limited review and this requires a little more down payment but in many cases more attractive for the buyers because it allows for the lender to require fewer items from the HOA and the buyer.  

There seems to be a lot of moving parts when financing a condominium, especially if it’s your first time to buy a condominium, but there skilled people in our area that can make this process go smoothly.  They can quickly answer the questions of the required down payment, how much reserves you need, 30 year fixed vs. arms.  
 
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