condo hotel mortgage financing

The Best Condotel Financing Solutions from Coast to Coast

Condotel Financing Mortgage Guidelines

Condotels are condominium units situated within a condo hotel. Owners of condotel units have the privilege of using their condominiums throughout the year and can rent out the condotel units when it is not in use. Most condo hotel complexes have a homeowner's association, which has the authority to lease the Condotel condominiums when they are vacant, typically for a percentage of the daily rent. Condotel units fall into the category of non-warrantable condos, which implies that they are not eligible for traditional financing from Fannie Mae and Freddie Mac.

Investing in a condotel (a condominium that operates as a hotel) can be an exciting and profitable venture, especially in a popular tourist destinations like Myrtle Beach, Charleston, Ft. Lauderdale etc... However, securing financing for such a unique property can be a complex process.  That's where we come in.

Condotel Program Highlights:

  • Competitive interest rates
  • No special assessments
  • Loan amounts up to $5,000,000
  • Quick and easy one page condo questionnaire
  • No minimum unit size:  500 sq feet or smaller considered
  • Units without a separate bedroom or full kitchen allowed on a case-by-case basis
  • DSCR (investor) loans available
  • Seller's concessions allowed

The Best Condotel Mortgage Lender

As you can see from our program highlights, Allied First Bank of The Carolinas specializes in providing condotel financing solutions.  We serve all 50 states so we can help you no matter where you or the property is located in the United States. Whether you are looking for a condotel for investment purposes or just for a second home, we have a program to fit your needs.

Condotel Financing Key Factors

Condotels have gained popularity as investment opportunities and vacation homes, but navigating the specific financing requirements can be a daunting task. We will provide you with a comprehensive overview of the condotel financing mortgage guidelines to help you understand the key factors involved in securing a condotel loan.

  • Understanding Condotels:  Also, known as condo hotels or hotel condominiums, are properties where individual units are sold to buyers who can enjoy their unit as a personal residence and also have the option to rent it out as a hotel room when not in use. These unique properties often come with amenities and services similar to a hotel, such as housekeeping, concierge services, and recreational facilities.
  • Non-Warrantable Condos: One important aspect of condotel financing is the classification of condotel units as non-warrantable condos. Non-warrantable condos are properties that do not meet the eligibility criteria set by government-sponsored enterprises such as Fannie Mae and Freddie Mac. As a result, condotel financing typically requires alternative loan programs and lenders who specialize in this niche market
  • Lender Qualifications and Loan Programs: When seeking condotel financing, it is crucial to find lenders who offer loan programs specifically designed for condotel properties. These lenders have a deeper understanding of the risks and requirements associated with condotel financing. They consider factors such as the property's financial health, occupancy rates, and the track record of the condo hotel management staff.
  • Down Payment and Interest Rates: Condotel financing often requires a higher down payment compared to traditional home loans. Lenders may ask for a down payment ranging from 20% to 30% or more, depending on the property and the borrower's financial profile. Interest rates for condotel loans might also be slightly higher due to the perceived higher risk associated with this property type.
  • Rental Income Considerations: If you plan to generate rental income from your condotel unit, lenders will take that into account during the loan qualification process. They may consider a portion of the projected rental income as part of your overall income when determining your loan eligibility. Providing historical rental income data or a professional market analysis can strengthen your case.
  • Homeowners Association (HOA) and Fees: Most condotel properties have a homeowners association (HOA) responsible for managing the property, including maintenance, rental arrangements, and shared amenities. Lenders may review the HOA's financial stability and operational efficiency to ensure that the property is well-managed and financially viable.

Navigating the condotel financing mortgage guidelines requires an understanding of the unique aspects and requirements of this property type. It is essential to work with a lender who specializes in condotel financing like Allied First Bank of The Carolinas, and can guide you through the process. Remember to consider factors such as rental income potential, and the financial health of the homeowner's association. By being well-informed and prepared, you can navigate the condotel financing landscape with confidence and find the right loan program for your condotel investment or vacation home.

Find out if you pre-qualify... TODAY!

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Request a Consultation with an Allied First Bank Loan Specialist

Allied First Bank of The Carolinas

  • Michael Parker
  • (800) 697-4371
  • MPO NMLS#: 457569
  • AFB NMLS#: 203463
  • 3804 Peachtree Ave.
  • Suite 200
  • Wilmington, NC 28403

Get a Free Rate Quote Online!

As a condotel lender, we specialize in offering financing for a wide range of condominiums, including condotels. Our services encompass condotel loans and loans for non-warrantable condo projects. If you're having difficulties finding condotel financing for the condo hotel you have your sights on, don't lose hope! Our goal is to assist you in acquiring the property you desire.

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(800) 697-4371

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