Condotel unit prices see sharp increase in California, Florida and Illinois
A condotel unit is a condominium unit within a hotel that is owned by an individual investor or private investors. A condotel used to be extremely popular in Florida in the mid 2000’s. However, with the financial and real estate meltdown, condotel units have also suffered major decline in values. To top it off, all major condotel lending institutions have halted condotel financing so those who owned condotel units and had interest rates in the high 8.0% range were stuck with their current mortgages and new condotel buyers were forced to buy their condotel units with cash. Values of condotel units have plummeted to below construction costs. The great news is that condotel unit sales have seen double digit growth and condotel unit prices have seen record price hikes in the past 12 months. 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 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, mortgage brokers like myself specialize in condotel financing from $100,000 up to over $3,000,000 in California, Florida and Illinois.
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.
Owner occupied units and second home condotel units credit criteria
Condotel financing borrowers need a minimum credit scores 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 40%. The maximum loan to value condotel financing terms are 75% for both condotel purchase loans and condotel refinance loans. For condotel unit borrowers who are seeking investment condotel loans, the maximum loan to value is 60%. Please contact me at www.gustancho.com if you are interested in condotel financing in California, Illinois and/or Florida. If you have credit scores below 680 FICO, visit Credit Fix Advisors at www.creditfixadvisors.com for credit advise on boosting your credit scores so that you qualify for Condotel Financing.