"Policy binding suspension as a result of Hurricane Isaias has been lifted as of 5 a.m. ET, on October 10, 2026. All regular Citizens business operations have resumed."
Citizens Property Insurance Corporation posted that line on its bulletin page less than nine hours after Isaias came ashore near Destin. The National Hurricane Center recorded landfall at about 8:30 p.m. CDT on Friday, Oct. 9, with 105-mph sustained winds. It was a Category 2 hurricane at landfall after peaking at Category 3 offshore, the Pensacola News Journal reported. Citizens had suspended binding statewide at 11:05 a.m. ET on Oct. 7. That covered new policies and coverage increases, whatever their effective date.
So the freeze most buyers worried about lasted three days at the state's insurer of last resort. For a Destin home or condo that was under contract before the storm, three other things now decide the timing. One is the lender's view of the property's condition. Another is a 1.5% line in the standard Florida contract. The last is a federal declaration category that sounds technical but changes how a loan gets underwritten.
The binding question is mostly settled, with one caveat
The Citizens suspension is over. Private carriers are a different matter. Each one issues its own binding notices, and we could not verify Isaias lift dates for the private homeowners carriers writing in Okaloosa County. Each carrier's status has to come from that carrier directly. One moratorium that does show up online, from Velocity Risk, names Okaloosa and Walton counties and lasts for the duration of the named storm. Velocity's page describes coverage for small-to-medium businesses, though, so it says nothing about a homeowners policy.
When a buyer still can't get a policy bound, the Florida Realtors/Florida Bar AS IS contract has a provision written for that situation. Its force majeure language lists the issuance of hazard, wind, flood or homeowners insurance as an essential closing service. If an event prevents it, the affected deadlines extend for a reasonable time, up to seven days after the event stops preventing performance. If performance is still blocked more than 30 days past the closing date, either party may terminate. With Citizens back to regular operations since Oct. 10, that clock covers fewer pending Destin deals than it would have last week.
Lenders now ask whether the house changed
If a property may have been damaged in a disaster, Fannie Mae's Selling Guide requires the lender to take "prudent and reasonable actions" to find out whether its condition has materially changed. The lender then decides whether a new inspection or appraisal is needed. The guide then sorts damage into two outcomes:
- Insured damage that doesn't affect safety, soundness or structural integrity. The loan can still be delivered. The lender has to document professional repair estimates and make sure enough money is set aside to finish the work.
- Uninsured damage, or damage that affects safety, soundness or structural integrity. The property has to be repaired before delivery.
Freddie Mac's disaster-property guidance, in the published version we reviewed, works the same way. Damage has to be documented and insured, and structural or safety damage has to be repaired and documented before the loan is sold.
For Destin's Gulf-front towers, one Fannie Mae sentence matters most. In a condo or co-op project, the lender assesses the condition of the unit and of the building it sits in. A unit can be spotless and still wait on what the association learns about the building.
So far, the early local picture favors the "repair with documentation" path more than the "repair first" path. At a recovery briefing on Okaloosa Island, local officials said buildings generally appeared to have handled the storm and that downed trees caused much of the damage, Get The Coast reported. The Governor cautioned at the same briefing that a tree falling on a home could be a serious problem. At HarborWalk Village, WKRG found business signs torn down and fallen limbs near the boardwalk entrance. And the Northwest Florida Daily News reported that the marlin atop AJ's Seafood and Oyster Bar was still in place.
Trees bring the contract into it.
The 1.5% line, and why trees count
Standard 18(M) of the current Florida Realtors/Florida Bar residential contract covers casualty damage that happens after the effective date and before closing. When restoration costs no more than 1.5% of the purchase price, the seller is responsible for them and closing goes ahead on the contract's terms. If repairs aren't finished by closing, 125% of the estimated cost is escrowed, capped at 1.5% of the price. If the work ends up costing more than the escrow, the seller covers the difference, still capped at 1.5%, and any unused escrow goes back to the seller.
Above 1.5%, the choice belongs to the buyer. The buyer either takes the property "as is" along with the 1.5%, or gets the deposit back and both parties are released. The AS IS form uses the same threshold and the same two options.
The clause's definition of restoration cost is what matters after Isaias. It includes the "cost of pruning or removing damaged trees," and for tree damage, pruning or removal is the seller's only obligation. If trees caused most of the damage, as local officials described, tree work counts toward the same 1.5% as the roof, the fence and the screen enclosure.
Here is how the line works on a hypothetical $1,000,000 contract. These are illustrative figures, not market data:
| Estimated restoration cost | Where it falls | What the contract does |
|---|---|---|
| $8,000, finished before closing | Under the $15,000 line | Seller covers it; closing goes ahead |
| $8,000, not finished at closing | Under the line | $10,000 escrowed, which is 125% of the estimate |
| $14,000, not finished at closing | Under the line | 125% would be $17,500, so escrow is capped at $15,000 |
| $22,000 | Over the line | Buyer chooses: take the property as is with $15,000, or get the deposit back |
On an $800,000 condo the line drops to $12,000, and on a $2.5 million Gulf-front home it rises to $37,500. The same storm damage can land under the line on one property and over it on another, depending only on price.
The federal word that decides FHA, and appraisal waivers
The state and federal declarations came quickly. Executive Order 26-202 declared a state of emergency on Oct. 6 that included Okaloosa and Walton, and EO 26-211 amended it on Oct. 7, expanding it to 27 counties. On Oct. 9, FEMA approved emergency declaration EM-3655-FL for Okaloosa and Walton, with an incident period starting Oct. 6. The release we reviewed describes direct federal emergency protective measures funded at 75%, not individual assistance.
For a mortgage, that wording carries weight. FHA's formal damage-inspection rules for pending loans apply in a Presidentially-Declared Major Disaster Area designated for individual assistance. Under those rules, an unclosed property needs a damage inspection with interior and exterior photos, and the appraiser may choose to do it by remote observation. A property with no damage can close. Habitable damage under $5,000 can be repaired or escrowed. Damage of $5,000 or more, or an uninhabitable property, has to be repaired before closing. As of Oct. 12, the FEMA material we found showed an emergency declaration, and nothing showed the individual-assistance trigger had been activated for Isaias.
Fannie Mae has a parallel rule. Its automated underwriting system is updated with ZIP codes in FEMA-declared disaster areas that are eligible for individual assistance. New loan casefiles for properties in those ZIP codes can't be considered for a new value acceptance offer, the program that lets some loans skip a traditional appraisal. If Okaloosa receives an individual-assistance designation later, FHA's inspection rules and that appraisal-waiver limit would both take effect.
What Destin's week looks like from here
These are the dated local markers that shape when inspectors, adjusters and contractors can reach a property:
- Friday, Oct. 9: All lanes of the Clyde B. Wells Bridge on US 331 South were shut, and the Walton County Sheriff's Office asked people to stay off the roads, Mypanhandle reported.
- Saturday, Oct. 10: U.S. 98 and I-10 were clear by morning, according to the Northwest Florida Daily News.
- Monday, Oct. 12: FPL was aiming to restore 95% of affected customers by the end of the day, WJHG reported. Okaloosa County's debris information call center opened from 6 a.m. to 6 p.m.
- Tuesday, Oct. 13: CHELCO's CEO told WJHG restoration should be complete by Tuesday at the latest.
- Wednesday, Oct. 14: Okaloosa County debris pickup is scheduled to begin in unincorporated areas. Storm debris goes to the curb loose, separate from household garbage, and clear of hydrants, mailboxes and meters. Residents of the City of Destin follow the city's own pickup guidance, Get The Coast reported.
For a pending sale, the debris schedule matters because the contract counts pruning and removing damaged trees toward the 1.5% line.
Quick answers
Can a Destin buyer get a Citizens policy bound right now? Citizens says its Isaias binding suspension lifted at 5 a.m. ET on Oct. 10 and regular operations resumed. Private carriers publish their own notices.
Does every pending loan get a new appraisal? Under Fannie Mae's guide, the lender decides whether an inspection or new appraisal is needed to confirm the property's condition.
Is cleared-away tree damage part of the seller's repair cost? Under Standard 18(M), restoration cost includes pruning or removing damaged trees, and that is the seller's only obligation for tree damage.
Do FHA's $5,000 damage rules apply in Okaloosa now? They apply to areas declared major disasters with individual assistance. As of Oct. 12, Isaias's FEMA declaration for Okaloosa was an emergency declaration.
If your Destin home or condo was under contract when Isaias came through, Luxury Beach Group can go through the repair estimates, the 1.5% calculation and the lender's condition questions with you, one closing date at a time. Discover Your Beach Life: Schedule a Consultation.
This article is general information, not legal, tax or financial advice. Consult a qualified professional about your situation.
