Florida Condotel Financing Mortgage Lending Guidelines
This BLOG On Florida Condotel Financing Mortgage Lending Guidelines Was Written By Alex Carlucci of Gustan Cho Associates
A Condotel, also referred to as a condo-hotel, is a condominium unit in a hotel complex that is owned individually by private owners.
- Condotels used to be extremely popular during the early 2000s until the 2008 Real Estate and Mortgage Meltdown
- After the 2008 real estate meltdown, condotel financing completely came to an abrupt halt
- Many lenders such as JP Mortgage Chase, Bank of America, Citibank, US Bank, and other large national lenders used to finance condotels and non-warrantable condos
- After the real estate market crash of 2008, all national banks stopped lending on condo-hotel units
- Most condotels are waterfront properties and/or are located in resort areas
- Florida is the birth of condotels
- Condotel units are starting to become more in demand due to available condotel financing and the ease of Florida Condotel Financing Mortgage Lending Guidelines
- Alexander Thomas Carlucci is a veteran loan officer and expert who specializes in helping buyers of condominium units in the state of Florida
- Alex Carlucci is also an expert in non-warrantable condominium financing
- Alex Carlucci can assist with Florida condominium unit buyers in financing their potential purchase
Alex is an expert on Florida Condotel Financing Mortgage Lending Guidelines.
Benefits Of Condotels
Condo Hotel units are becoming more and more popular:
- This is because condo-hotel units are maintenance-free
- The condominium complex homeowners association manages the individual units in lieu of the monthly homeowners association fees
- Many unit owners can rent out their condo units when they are not occupying it
- The homeowners association will rent the units out in return for a percentage of the revenue
- Many unit owners do get a positive cash flow by renting their units and still enjoying the units throughout the year
- It is like having a vacation home for free where the revenues of the unit pay for the mortgage payments and expenses.
Florida Condotel Financing Mortgage Lending Guidelines And Requirements
Condo Hotel mortgage loans are portfolio loans:
- This means lenders hold the mortgage note in house in their portfolio
- Up to now, most condotel unit buyers did not access to financing
- The great news is financing is back
Buyers who dreamed of buying a condotel unit as a second home, vacation home, or investment home can now have the opportunity to purchase a unit with financing available.
Eligibility Requirements And Guidelines
Here are the financing requirements for primary and second-home buyers.
- The condotel unit needs to financially sound with no pending litigation or major building violation
- The condotel unit needs to be at least 500 square feet
- Have a least one bedroom
- Full kitchen (kitchenettes are not allowed)
- Minimum loan size is $100,000 and the maximum loan size is $3 million
- 25% down payment, 75% loan to value, is required for primary and second condotel unit buyers
- 40% down payment, or 60% loan to value is required if the unit is an investment property and unit buyer has two or more properties
- Borrowers need a minimum 680 Credit Score
- Maximum debt to income ratios cannot exceed 40% DTI
- No prior bankruptcies, foreclosures, deed in lieu of foreclosures, a short sale in the past 4 years
Buyers with a prior bankruptcy, foreclosure, deed in lieu of foreclosure, a short sale will need a letter of explanation as of the extenuating circumstances:
- Extenuating circumstances acceptable for bankruptcy and/or foreclosure include medical issues, loss of job, and divorce
Foreign Nationals can qualify for financing as long as they have a work visa and are employed either by a U.S. Company and/or a subsidiary of a U.S. Company with no credit scores required. We will help foreign nationals establish credit. Special program for foreign nationals where we offer and assist with auto financing, credit cards, and other forms of credit to foreign nationals.
About The Author Of Florida Condotel Financing
Alex Carlucci is a contributing writer for Gustan Cho Associates. Alex is a veteran Florida Condotel and Non-Warrantable Condominium mortgage loan officer. Alex is familiar with all of the major condotel complexes in the state of Florida as well as new Condotel development projects not just in the Orlando Area, but throughout the state of Florida.
August 9, 2018 - 3 min read