Condo Hotel Financing: Condotel Purchase & Refinance Loans

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This BLOG On Condo Hotel Financing Was UPDATED On July 26th, 2019

Condo Hotel Financing

There is a large percentage of condo hotel unit owners who still have their current condotel loans at high mortgage rates.

  • Many of the condotel unit owners have their condotel mortgage loans with big banks such as JP Morgan Chase, Wells Fargo, Bank of America, Citibank, and other large condo hotel financing companies
  • Although condotel borrowers have been timely with perfect payment history, the big banks will not refinance their current condotel loans
  • Big banks and most lenders have stops condo hotel financing since Fannie Mae and Freddie Mac will not purchase them on the secondary market

Banks No Longer Fund Condo Hotel Financing

Banks No Longer Fund Condo Hotel Financing

Unfortunately, these banks are not willing to refinance the condotel mortgage loans they are currently servicing.

  • It does not matter if the borrower is a premier client with other assets with their bank
  • Big banks are not interested in refinancing the current condo-hotel loans they have on their books
  • Gustan Cho Associates specialize in condo hotel financing
  • We cater to both condotel purchases as well as condotel refinance mortgage loans
  • I can help those condo hotel unit owners nationwide who need condotel purchase and refinance loans

Condo Hotel Financing Requirements

Condo Hotel Financing Requirements

  • Condotel Unit needs to be at least 500 square feet
  • Condo Hotel Unit needs to have at least one bedroom and functional kitchen
  • Condo Hotel Complex needs to have sufficient reserves and cannot have any pending litigation
  • Condo Hotel Complex cannot have major pending building violation or be in bankruptcy or pending bankruptcy
  • 25% down payment on purchases and 75% LTV on refinances for owner-occupied and second homes
  • 40% down payment on purchases and 60% LTV on refinances on investment condotels
  • If a borrower has a primary residence and another investment home, any purchases thereafter are considered investment homes so investment condo hotel financing requirements will apply

Why Is Appraisal Research Needed On Refinance Condo Hotel Financing?

Why Is Appraisal Research Needed On Refinance Condo Hotel Financing?

This way, if the appraisal comes in lower than your anticipated value, condotel unit owners can either consider contesting the appraisal or paying down the loan balance if they do not meet the LTV Requirements.

  • An appraisal can be contested if there are comparable units that are similar to the subject unit.
  • Appraisal Rebuttals are difficult
  • In the event, if the appraisal comes in lower than the anticipated estimate, the only way the condo-hotel refinance loan will go through is by paying down condotel mortgage balance so it falls within the 75% LTV on primary/secondary homes, and 60% LTV on investment homes
  • Condotel appraisals are arbitrary and there is no set formula on the value it will come in
  •  Recent comparable sales are the only way to win appraisal rebuttals
  • However, with no comparable sales, whatever the appraised value is will be what the value lenders will go by
  • Condo Hotel Financing is 30-year adjustable-rate mortgages: 3/1, 5/1. 7/1 ARM

Realtors Specializing in Condotel Buyers

Realtors Specializing in Condotel Buyers

I would consult with realtors who specialize in condo hotels in your area to find out what comparable condotel units are selling for and what they have recently sold for.

If you are interested in a condotel purchase loan or a condotel refinance mortgage loan please contact us at Gustan Cho Associates at 262-716-8151 or text us for faster response. Or email us at gcho@loancabin.com or visit us at www.gustancho.com.

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