Condotel Financing Mortgage Guidelines And Requirements

This BLOG On Condotel Financing Mortgage Guidelines Was UPDATED On October 5th, 2017

Condotels are condominium units that are within a condo hotel and the condo hotel management staff is responsible for its upkeep, rentals, and maintenance for a percentage of the rental income.

  • If the condo hotel management staff does not rent condotel unit, they do not make any income.

Downturn Of Condo Hotel Market

Condotel unit values have plummeted during the real estate, banking, credit, and financial collapse of 2008.

  • However, condotels have seen a steadily increase in value and this year, condotel units have sky rocketted to double digit increases in some areas of Florida. 
  • One of the main factors why condotel units have not kept up with other property appreciation is  due to the fact that condotel financing have come to an abrupt halt after the real estate and financial collapse of 2008.

Condotel Financing Mortgage Guidelines & Demise Of Condotel Financing After Real Estate Meltdown

Many banks and mortgage bankers used to finance condotels prior to the collapse and many condotel unit owners still have condotel financing loans with big banks such as Wells Fargo, Chase, Citibank, Bank of America, and other local, regional, and national banks at high interest rates.

  • Unfortunately, these banks and mortgage lenders will not even consider refinancing condotel units ever though they carry and service the condotel unit mortgage note. 
  • It does not matter whether you have been paying your condotel mortgage loan payment timely for many years.
  • Or whether you have other asset accounts with their institution. 
  • The answer will always be no. 
  • The good news is that The Gustan Cho Team at USA Mortgage specialize in condotel financing in the United States.
  • We can help first time home buyers or vacation home/second home condotel buyers. 
  • We also offer condotel investment mortgage loan programs for condotel investors .
  • Or real estate investors who are interested in purchasing multiple condotel units and add them to their real estate investment portfolio.

Primary and Second/Vacation Home Condotel Financing

Those who do not own a primary residence or own a primary residence but are looking to purchase a second home or vacation home came to the right website. Condotel Financing Mortgage Guidelines at USA Mortgage is now available. We offer a 30 year portfolio condotel mortgage loan but on a 3/1 ARM, 5/1 ARM, or 7/1 ARM.

  • The rates are fixed for the first, 3, 5, or 7 years.
  • Depending on which adjustable rate mortgage program the borrower chooses, the rates will adjust every year after the fixed rate period for the life of the condotel mortgage loan.
  • The index is based on the Cost Maturity Index ( CMT ) .
  • The margin is a 3.0% fixed margin rate. 
  • The adjustment rate cannot be lower than the starter rate. 
  • Condotel Financing mortgage rates has a starter rate. 
  • This is based on today’s pricing and cannot guarantee a rate until we lock condotel financing mortgage loan.

Loan To Value On Condotel Financing

The maximum loan to value allowed is 75% LTV on purchase condotel mortgage loans and refinance condotel mortgage loans.  Cashout refinance condotel mortgage loans are allowed up to a 75% LTV as well.

  • Keep in mind that the 75% loan to value is only for primary homes, second homes, and investment homes. 
  • For those condotel buyers who have two or more properties are considered investors and for investment condotel financing, the loan to value cap is set at 60% LTV.  
  • Both of the loan to value cap was just increased. 
  • Prior loan to value caps were 70% loan to value for primary, second, vacation homes and 50% loan to value for investment condotels.

Condotel Financing Credit Requirements And Condotel Financing Process

To qualify for condotel financing, the borrower needs a minimum credit score of 680 FICO.

  • The borrower needs one years reserves which can be in pension funds, investment accounts, or other documented assets for both the primary residence as well as the subject condotel purchase. 
  • A maximum of 40% back end debt ratio is required. 
  • In the event if the condotel financing mortgage loan borrower is short with wage income, other income sources can be used. 
  • We can used the asset depletion program where a percentage of the borrower’s assets can be used for income qualifying purposes.

Issues On Condo Hotel Building

The condo hotel complex cannot have major building or structural issues and cannot be in financial despair.  Any structures or buildings associated with the condo hotel cannot be under bankruptcy protection nor can there be any major pending litigation.  If you are interested in purchase a condotel unit, please contact me at 262-716-8151 or at Gustan Cho Associates , www.gustancho.com .

Gustan Cho NMLS ID # 873293

Related> Condotel Financing

Related> Condotel Mortgages

Related> Qualifying For A Condo Hotel Mortgage Loan

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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