Nicknamed the world’s luckiest fishing village, Destin is an incredible vacation destination. One way people choose to enjoy Destin is by owning a condo here. However, there are many options for condo ownership. That includes the possibility of owning a warrantable condo in Destin.
However, many buyers might not understand the difference between a warrantable and an unwarrantable condo. How should the difference affect your decision? This post will cover what a warrantable condo is and what it means for buyers.
Emerald Coast Real Estate Market Watch
In May 2023, homes in Destin, FL, sold days on the market was an average of 85 days on the market. This is up from 61 days in May, 2022. Real estate data changes day by day. If you need to buy or sell in Destin or anywhere on the Emerald Coast, please click here to contact us.
Without further delay, here are five essential guidelines for warrantable condos in Destin.
In simple terms, warrantable condos are ones with approval from Freddie Mac and Fannie Mae. It means they meet the standards for government-backed loans. That means there’s less risk for lenders, making it easier to get financing.
With the definition out of the way, let’s look at the key guidelines for warrantable condos.
The government generally only backs loans for primary residences and not investment properties. It is not warrantable if a condominium building is mostly vacation properties or investment rentals. The general rule is that at least half the units must be owner-occupied.
Warrantable condos must be in financially stable condo communities. A financially stable complex means the HOA has enough reserves for maintenance and repairs. Finances are important for buyers and lenders.
Insurance is important for all condo communities. It ensures the building and grounds have coverage from various hazards and liabilities. However, there are stricter insurance requirements for warrantable condo communities.
Legal disputes can also be an issue for condo projects. If the project is currently involved in litigation, it might not get approval from Fannie Mae or Freddie Mac.
Many condo communities include commercial space. While this can add value for owners, it can also determine whether the condos are warrantable. The project is not warrantable if more than 35% of the space is non-residential.
Are you looking to buy or sell a home on the Emerald Coast? If so, I’d love to help you. Please click here to contact me.
If you’d like to know more about me, please click here. I look forward to hearing from you!
Thanks for visiting!