Condo Financing On 30A: What Lenders Expect

Buying a condo in Sandestin or along 30A feels exciting until financing questions pop up. Unlike a single-family home, your lender will underwrite both you and the building. If the project misses certain checkpoints, your loan options can narrow fast. In this guide, you’ll learn how lenders view 30A condos, what “warrantable” means, how condotels and short-term rentals affect approval, which documents matter most, and the best steps to take before you write an offer. Let’s dive in.

What lenders review on 30A

Lenders look beyond the unit. They evaluate the entire condominium project to judge risk and marketability.

• Warrantability status and investor eligibility
• Owner-occupancy mix versus rentals
• Single-entity ownership concentration
• Amount of commercial space in the project
• Association reserves, operating budget, and any special assessments
• HOA dues delinquencies
• Master insurance, fidelity coverage, and flood insurance where required
• Pending or threatened litigation
• Building condition and safety, including any structural reports

Common thresholds used in the industry include at least half of the units owner-occupied, single-entity ownership under about 10 percent, commercial space kept modest, and low HOA delinquencies. Many lenders also look for meaningful reserves and worry about large recent or pending special assessments. Exact cutoffs vary by investor and lender.

Warrantable vs non-warrantable basics

A warrantable condo meets conventional investor or government program standards. That allows a lender to sell the loan into the secondary market. A non-warrantable condo misses one or more tests, which can limit financing to portfolio or specialty lenders.

Common reasons a project is non-warrantable:

• Hotel-style features such as a front desk, daily housekeeping, or centralized booking
• A high share of short-term rentals
• Too much ownership by one investor or entity
• Low owner-occupancy rates
• Significant commercial use inside the legal project
• High HOA delinquencies, thin reserves, or recent large special assessments
• Material litigation that touches finances or habitability
• Missing or inadequate project documentation

If the project is non-warrantable, you may still finance, but expect larger down payments, higher rates, and more documentation. Portfolio lenders and certain non-QM programs often fill this gap.

Condotels and short-term rentals

Sandestin and Miramar Beach are strong vacation markets. That is great for rental demand, yet it can trigger tighter underwriting.

• Condotels often include a front desk, concierge services, daily housekeeping, and shared rental programs. Many conventional and government investors exclude these from standard financing.
• Even without a formal condotel label, a project with heavy short-term rental use can face extra scrutiny.
• Insurance can be more complex in these buildings, which also affects lender acceptance.

If your target building runs like a hotel or has a high percentage of short-term rentals, plan for a portfolio loan. Many buyers succeed with 20 to 30 percent down and a lender that understands 30A’s vacation market.

Reserves, assessments, insurance, litigation

These four items can make or break approval.

• Reserves: Lenders look for a current reserve study and consistent funding. A commonly referenced benchmark is a reserve contribution near 10 percent of the annual budget, though practices vary.
• Special assessments: Large or frequent assessments are red flags. Lenders will ask about size, purpose, and whether the seller will pay what is due before closing.
• Insurance: Expect a review of the master policy, liability coverage, and fidelity bond. In coastal Florida, flood insurance is often required where applicable.
• Litigation: Structural or financial disputes carry weight. Routine matters may be acceptable, but major claims can jeopardize eligibility.

Loan types for Sandestin buyers

Here is how common loan channels treat condos.

• Conventional conforming: Best terms when the project is warrantable. Lenders will verify occupancy mix, reserves, delinquencies, commercial space, litigation, and that no condotel flags exist.
• FHA: Requires condo project approval and is aimed at primary residences. Condotels and heavy short-term rental projects are usually not eligible.
• VA: Requires VA project approval and is for eligible veterans and active-duty service members who will occupy the unit.
• Portfolio and local bank loans: Often the solution for non-warrantable projects. Expect higher down payments, higher rates, and detailed project documentation.
• Non-QM or private money: Useful for complex or time-sensitive scenarios, usually at higher cost and often short term.

For second-home buyers, warrantable projects can still qualify for conventional loans. Investor purchases face tighter requirements, especially in buildings with heavy short-term rentals.

Documents your lender will request

Order key HOA documents early so your lender can review the project quickly.

• Declaration, Articles, and Bylaws
• Current annual budget and HOA dues schedule
• Last 2 to 3 years of financial statements
• Reserve study and proof of reserve funding
• Board meeting minutes for the last 12 to 24 months
• Master insurance certificate and flood insurance details
• Owner roster showing any single-entity ownership concentrations
• Litigation letter confirming status of claims
• Estoppel certificate for the unit to confirm fees and assessments
• Rental policy, including minimum lease terms and short-term rental rules
• The lender’s condominium questionnaire, completed by management

Florida law provides specific disclosure and estoppel requirements for condominiums. In practice, delayed questionnaires or incomplete financials are the most common reasons condo loans slow down.

Your 30A financing game plan

Take these steps to protect your timeline and terms.

1. Pre-contract check: Ask for the budget, financials, reserve study, minutes, insurance summary, and rental policy. Flag any pending special assessments.
2. Identify the project type: Confirm whether the building is likely warrantable or has condotel features or heavy short-term rental use.
3. Match lender to building: If the project is clean and warrantable, conventional may fit. If not, talk to a portfolio lender early.
4. Prepare your down payment: Warrantable projects may allow standard terms. Non-warrantable projects often require 20 to 30 percent down.
5. Plan for insurance: Budget for unit-level flood insurance if your flood zone or lender requires it.
6. Negotiate smart: Seek seller concessions to cover estoppel fees or to clear any owed assessments when possible.

How we help you win financing

You deserve a smooth path from offer to close. Our role is to anticipate lender questions, gather the right HOA documents early, and steer your search toward buildings that match your financing plan. We coordinate with experienced local lenders, watch for condotel triggers, and help you position your offer to meet tight timelines.

If you want thoughtful guidance and a curated path to the right condo, reach out to The Richards Group. We combine boutique service with the reach of Compass to help you secure the property and the lifestyle you want on 30A.

FAQs

What makes a condo non-warrantable on 30A?

• Hotel-like operations, heavy short-term rentals, high single-entity ownership, low owner-occupancy, thin reserves, large assessments, major litigation, or excessive commercial space can all lead to non-warrantable status.

Can you finance a condotel in Sandestin?

• Yes, but not with standard conforming or many government-backed loans. Buyers typically use portfolio or specialty lenders with larger down payments and higher rates.

How do special assessments affect loan approval?

• Large or frequent assessments raise risk. Lenders ask about purpose, size, and whether the seller will pay amounts due before closing. Big structural assessments can block approval.

What down payment is common for non-warrantable condos?

• Many portfolio lenders look for 20 to 30 percent down, depending on the project’s risk profile and your qualifications.

Which HOA documents should you request before making an offer?

• Ask for the budget, financials, reserve study, meeting minutes, insurance details, rental policy, litigation letter, and confirmation of any pending assessments, plus the lender’s condo questionnaire.