Condotel Financing Guidelines Require 25% Down Payment

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Condotel Financing Guidelines Require 25% Down Payment

This BLOG On Condotel Financing Guidelines Require 25% Down Payment Was UPDATED On June 16th, 2019

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 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 ARM 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 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 1-262-716-8151 or text us for faster response or email us at gcho@loancabin.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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