Condotel Financing Guidelines

Condotel Financing Guidelines Require 25% Down Payment

ByAlex Carlcucci
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This article on Condotel Financing Guidelines Require 25% Down Payment

Condotel Financing Guidelines Require 25% Down Payment for owner occupant and second home Condotel financing and 40% down payment on investment Condotel units. A Condotel unit is a condominium unit within a hotel that is owned by an individual or private investors.

A Condotel used to be extremely popular in Florida in mid-2000s. However, with the financial and real estate meltdown, Condotel units have also suffered a major decline in values. To top it off, all major Condotel lending institutions have halted Condotel financing so those who owned Condotel units. Most Condotel unit owners have interest rates in the high 8.0% range. Condotel Financing came to an abrupt halt back in mid-2008 right after the 2008 subprime crash. Many were stuck with their current mortgages. New Condotel buyers were forced to buy their Condotel units with cash due to a lack of Condotel financing. Values of Condotel units have plummeted to below construction costs.
The great news is that Condotel financing is back. Condotel unit sales have seen double-digit growth and Condotel unit prices have seen record price hikes in the past 12 months due to new Condotel Financing Guidelines making financing possible. The reasoning for this is due to the rebound in the real estate market and the comeback of Condotel financing. Condotel mortgage loans are still a rare specialty by mortgage brokers, but mortgage brokers like myself specialize in Condotel loans.

Condotel Financing

Condotel financing is back. There was a time for the past three years that not a single mortgage lender would touch a Condotel unit.  Condotel financing was totally unheard of. However, lenders like myself specialize in Condotel financing from $100,000 up to over $3,000,000 nationwide.

Condotel Financing Programs

The Condotel financing products I have to offer are 7/1 ARM, 5/1 ARM, and 3/1 ARM amortized over 30 years. The Condotel unit has to have at least one bedroom and a separate kitchen. The ARMS product is based on the Cost Maturity Index and the margin is 3.0%.
Starter interest rates are at 5.0%. The Condotel unit complex needs to be both in good financial standings and structurally safe with no pending major building violations.

Condotel Financing Guidelines: Owner Occupant And Second Homes

Condotel Financing Guidelines

Condotel financing borrowers need a minimum credit score of 680 FICO and need one year’s reserves for both their main residence as well as the subject Condotel unit.

  • The maximum back-end debt to income ratio cannot be more than 43%.
  • The maximum loan to value Condotel financing terms are 75% for both Condotel purchase loans and Condotel refinances loans on owner occupant and second home Condotel financing.
  • For Condotel unit borrowers who are seeking investment Condotel loans, the maximum loan to value is 60%.

Please contact us at Gustan Cho Associates 1-800-900-8569 or text us for faster response or email us at gcho@gustancho.com.
Condotel mortgage loan applicant with credit scores below 680 FICO, contact us on boosting credit scores to qualify for Condotel Financing

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