Condo Hotel Financing Mortgage Loan Guidelines

Many current condotel owners nationwide still have high-interest rates on their condo hotel mortgage loans.  Some have interest rates as high as 9%. Capital Lending Network, Inc. has a large clientele base of condotel borrowers throughout the United States. We are licensed in multiple states and can help condotel buyers and owners with condotel financing on purchase and refinance transactions.

Condo Hotel Mortgage Lenders

Condotel Financing Mortgage Lenders

Condo Hotel mortgage loans are only offered by a few portfolio lenders. These loans have increasingly become difficult. Many condotel unit owners have loans with larger banks like JP Morgan Chase, Wells Fargo, Citibank, and Bank of America. Unfortunately, all banks stopped originating condotel unit loans. This holds true even to borrowers who have condotel loans already with their lending institution.

Condotel Mortgage Loan Programs

Condotel Financing is adjustable-rate mortgages amortized over 30 years. The following adjustable condotel financing mortgage options are available:

  • 3/1 ARM
  • 5/1 ARM
  • 7/1 ARMs

In this article, we will discuss and cover condotel financing mortgage requirements from portfolio lenders.

Big Banks And Condo Hotel Mortgage Loans

Even though these condotel unit owners have been loyal clients of these banks, these banks are not willing to do their condotel refinance loans. The team at Capital Lending Network, Inc. specializes in condo-hotel refinance loans and condotel purchase loans Nationwide. Capital Lending Network Inc. gets dozens of condotel to refinance loans inquiries every day. One of the hurdles with condotel refinance loans is that many condotels do not qualify for condotel refinance loans. This is because of the loan to value requirements.

Down Payment Requirements on Condotel Purchase Transactions

Down Payment Requirements on Condotel Purchase Transactions

In general, 25% down payment and/or 75% loan to value is required on condotel purchase and refinance loans. If the condotel appraised value comes in below the condotel purchase price, the condotel buyer needs to come up with the difference between the sales price and appraised value plus the 25% down payment from the appraised value. If the buyer only has a 25% down payment,  the condotel unit owner can make up the difference of the minimum loan to value requirement and the appraised value of their condotel unit in order for the buyer to just put a 25% down payment.

Condo Hotel Mortgage Loans Rates & Minimum Loan to Value Requirements

The minimum loan to value requirement on condotel mortgage refinance loans is 75% loan to value on primary and second condotel mortgages. The loan to value is 60% on investment condotel mortgages. A large percentage of condotel unit owners purchased their condo-hotel units in the mid-2000s. They either paid top dollar for their condo hotel units or have only put down 20%. The value of Condo Hotel units in Florida and nationwide have dropped significantly in recent years but is on its way back up. Condotel mortgage rates are higher than conventional rates. Condotel Refinance is adjustable-rate mortgages based on index and margin.

LTV On Condo Hotel  Home Purchase and Refinance Requirements

Condotel unit owners who are planning on refinancing their condotel unit mortgage need to make sure that they meet the loan to value requirements. Loan To Value requirements is 75% LTV on primary and second homes.

Cases When Condotel Unit Does Not Meet Appraised Value

Cases When Condotel Unit Does Not Meet Appraised Value

If the condotel unit appraises out at a lower value, the refinance cannot go through:

  • unless the borrower can meet the 75% LTV
  • Investment Unit condotels require 60% Loan To Value
  • Any condotel unit owners with three or more properties are considered investment condotel refinance mortgage loans
  • On condotels with the loan to value greater than 75% loan to value, unit owners would need to pay down the condotel mortgage loan so it falls at or below the 75% loan to value

The condotel unit needs to be at least 500 square feet, have at least one bedroom, and have a fully functional kitchen.

In this blog, we will cover and discuss condotel financing and non-warrantable condominium loans.  Many veteran real estate agents remember how hot condotel units were. Especially throughout the state of Florida followed by California. Many realtors are still under the belief that condotel and non-warrantable condominium financing is extinct.  We are experts in condotel and non-warrantable condominium mortgage loans.

Condotel Housing Market

The condotel financing market has dried up since the real estate and credit collapse of 2008. Large banks such as JP Morgan Chase, Wells Fargo, Citibank, and Bank of America has stopped lending on condo-hotel units. The abrupt halt in condotel and non-warrantable condominium financing by lenders has forced Florida and California realtors to only entertain cash offers to condo-hotel unit buyers.

Condotel Financing Offered By Non-QM and Alternative Mortgage Lenders

The great news for Florida and California real estate agents is that CLN now offers condotel financing to qualified condotel unit buyers. We also offer to refinance condotel loans for condotel homeowners. In this article, we will discuss and cover the qualification requirements for condotel and non-warrantable condo financing.

Condotel Financing In Florida And California

We are licensed in multiple states. However, Condotel and Non-Warrantable Condos are extremely popular in both the states of Florida and California. Florida is the birth of condo hotels and there are thousands of condotel units throughout the state of Florida.

Condo Hotel Mortgage Loans Programs

Condotel loans are portfolio loans and we now offer 30-year condotel financing via:

  • 3/1 ARM
  • 5/1 ARM
  • 7/1 ARM

The index is based on the Cost Maturity Treasury (CMT):

  • One year treasuries (CMT)
  • The margin is at 3.0%

Condotel Financing Guidelines

Here are the basic qualification requirements:

Condo Hotel Complex needs to qualify:

  • No major litigation and the condo-hotel complex
  • Complex needs to be in good financial shape with no major building violations or structural issues

Condotel unit needs to qualify:

  • Have at least one bedroom
  • No studios
  • A full-sized functional kitchen that includes
  • Dishwasher
  • Full-size refrigerator
  • Stove
  • Condotel Unit needs to be a minimum of 500 square feet

Condo Hotel Mortgage Loans Eligibility Guidelines

Condotel Financing buyer needs to have a minimum of 680 credit scores. The maximum borrower’s back-end debt to income ratio needs to be no greater than 43%. Minimum down payment of 25% for primary, second home, and vacation home condotel financing. Minimum down payment of 40% for investor condotel financing program. 75% loan to value for refinancing and cash-out refinance for second/vacation condotel financing. One-year reserve for both primary residence and condotel unit housing payments. Reserves do not have to be in cash. IRA, 401k, securities, and other forms of liquid-able assets can be used to meet one-year reserve requirements.

Non-Warrantable Condominiums

Non-Warrantable Condos are condos in a condominium complex that is comprised of 51% or more investor-owned units. There is no way of telling whether a condo complex is warrantable and/or non-warrantable. The condo homeowners association is the department that can tell condo buyers whether or not a condo is warrantable and/or non-warrantable. A condo complex can go from warrantable to non-warrantable depending on the owner-occupancy. Fannie Mae and Freddie Mac do not allow non-warrantable condominium financing.

Condotel Mortgage Lenders

Capital Lending Netwotk can help home buyers of non-warrantable condominiums. Here are the non-warrantable financing guidelines:

  • Condo unit needs to be at least 500 square feet
  • Have at least one bedroom
  • Full-size kitchen
  • No pending lawsuits against the condo association
  • 20% down payment
  • 80% loan to value on cash-out refinances
  • 680 borrower credit scores
  • One year reserves on PITI on both primary residence and/or other properties borrowers own

Home Buyers of condotel units and/or non-warrantable condos who need financing, please contact us at  800 900 8569 or apply here.  We are available 7 days a week, evenings, weekends, and holidays.