Condominium Questionnaire On Non-Warrantable And Condotel Financing

This BLOG On Condominium Questionnaire On Non-Warrantable And Condotel Financing Was UPDATED On August 6, 2017

Non-Warrantable and Condotel Financing are a specialty niche mortgage product and is only offered by a few portfolio lenders. The Gustan Cho Team are experts in originating and funding Non-Warrantable and Condotel Mortgage Loans.

  • Loan Officers at The Gustan Cho Team are experts in financing condotel loans and non-warrantable condominiums.
  • We can help borrowers with purchase condotel loans and refinance condotel loans. 
  • There is a two step underwriting process with condotel loans. 
  • The first process is that the condo hotel project needs to be approved. 
  • It is a fairly quick and simply underwriting process. 
  • A one page condominium questionnaire needs to be completed by the HOA manager and submitted to our underwriter.  
  • The underwriter should come back with an approval within 24 hours. 
  • Cases where the underwriter denies the condo hotel project is when the condo hotel complex is under financial distress like a pending bankruptcy, bankruptcy, or massive foreclosures in the condo hotel complex. 
  • Other reasons condotel loans get denied is because the condo hotel complex has serious building code violation issues.

Two Phases Of Underwriting For Condotel Mortgage Loans

The second underwriting phase is the condotel unit loan borrower.

  • Minimum credit scores required is 680 FICO credit scores.  
  • Debt to income ratios cannot exceed 43%. 
  • One year’s reserves of principal, interest, taxes, insurance, and hoa dues are required for both the condotel unit and the condotel borrower’s principal residence. 
  • Three months of those reserves need to be in cash and the balance can be in securities, IRA’s, 401K, and other liquid investment accounts. 
  • A maximum of 75% loan to value is required on principal, second, and vacation home condotel loans.
  • Maximum 80% loan to value on non-warrantable condominium loans for principal and second homes.
  • 60% loan to value is required for investment condotel loans and non-warrantable condominium financing.

Completing The Condominium Questionnaire

Here is a typical condominium questionnaire that needs to be completed by the condo hotel homeowners association manager or representative.

  • Condo Hotel Project Name
  • Street Address
  • City State Zip Code
  • Facility Information
  • Has control of the project been turned over to the H.O.A.?   Yes   or No
  • Are the amenities complete?  Yes or No
  • Is all construction or phasing complete?  Yes or No.  If yes, date turned over.
  • Are all common areas and recreational facilities associated with the entire project for the subject phase complete? Yes  or No.
  • If no, does the project have sufficient funds for completion?  Yes  or No
  • Is the project a cooperative?  Yes or No.
  • Is the project a condominium hotel?  Yes or No.
  • Is the project a timeshare or segmented ownership project?  Yes or No.
  • Is the project a multi-dwelling unit condominium (in which ownership of multiple units is evidenced by a single deed and mortgage)?  Yes or No.
  • Does the condominium represent a legal but nonconforming use of the land (if zoning regulations prohibit rebuilding to current density in the event of deconstruction)?  Yes or No.
  • Is the project a conversion?  Yes or No.
  • If yes, is the conversion a gut rehabilitation (where the renovation has stripped the property to the shell and all HVAC and electrical components have been replaced)?

Property Information

If the builder is in control of the project, or the H.O.A. has been in control for less than a year, please submit the Declarations, Bylaws, Insurance Certificate and Budget and Appraisal with the completed condominium questionnaire.

  • Is the project built on a leasehold estate?  Yes or No.
  • Total Number of Phases
  • Total Number of Units
  • Total Number of Units Rented (Investor)
  • Total Number of Units Sold
  • Total Number of Units for Sale
  • Total Number of Owner-occupied Units (Principal Residences and Second Homes)
  • Does any single entity own more than 10% of the total units in the entire project?  Yes or No.
  • Highest number of units owned by one entity
  • Is any portion of the project designated for commercial use only?
  • If yes, what percentage of the project?
  • Property Use and Benefit Information:
  • Does the project allow daily rentals?
  • If yes, what percentage is available for daily rentals?
  • Does the project contain a rental desk?
  • Does the project participate in a mandatory rental pool?
  • Does the project provide food service?
  • Does the project provide daily Housekeeping?
  • Does the project provide blackout dates restricting the owner’s use?
  • Is the project the subject of current litigation?
  • Please provide a letter of explanation for any current litigation.

Property Financial Information

  • What is the amount currently held in reserves for replacement or repair of major components?
  • Total number of unit owners currently over 30 days past due with their monthly H.O.A. fees.
  • Total dollar amount past due.
  • Are the taxes for the individual units included in the H.O.A. fees?
  • Projects in which the taxes are included in the H.O.A. fees are ineligible.
  • H.O.A. Contact  name and  Phone Number.

Condotel Loans Have Quick Underwriting And Approval Process

Unlike conventional and FHA loans, Condotel loans have less red tape and have quick turnaround times since they are portfolio loans and do not have the intensive guidelines Fannie Mae and FHA loans do.

Non-Warrantable and Condotel Buyers who need to get more information on financing, please contact The Gustan Cho Team at 1-800-900-8569 or email us at gcho@gustancho.com.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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