Condo & Condotel Loans
How to Qualify for a Condo Mortgage Loan?
If you need financing for a condo, we are among the leaders with an array of loan products that will likely provide the terms you want within reason. Types of condos that can be financed through our network of licensed mortgage consultants are:
- Low rise condos
- High rise condo buildings (more than 8 floors)
- Non-warrantable condos
- Single-story attached condos
- Mixed-use properties (residential and commercial/retail)
from $200,000 and up
Before putting in an offer to buy, you should check if the building is Fannie Mae, Freddie Mac, or FHA or VA approved because then you will likely get better financing terms with as low as 3-percent down. If it not approved by one of these, then it is likely to be a non-warrantable condo.
What is a Non-warantable Condo
Typically, a condo is considered non-warrantable if one of the following applies:
— A single person or entity has ownership of greater than 10% of the units in a project
— New construction condos, since the developer will likely own more than 10%
— Established condo development with additional phases in need of completion
— More than 51% of the units are rentals
— Greater than 15% of the units are late on their association dues
— There is pending litigation against the homeowner's association (HOA)
— More than 25 percent of the total building square footage is designated for Commercial use.
Can I finance a non-warrantable condo? Yes, you can if you qualify.
There are some lenders who will lend on a non-warrantable condo but usually with slightly higher interest rates and lower loan to values (75 to 80 percent financing is usually the maximum).
This means don't expect to put 10 percent down for this type of condo. We do have an 85-percent financing program (except new construction).
A condotel is a building featuring condominium units that are able to be rented daily, weekly, and/or have a check-in desk. Essentially, it operates the same as a hotel with short-term rentals. These are commonly found in vacation/resort areas like San Diego, San Francisco, L.A., coastal areas of Florida (Miami, Naples, Fort Lauderdale, West Palm Beach, Destin, Daytona Beach, Orlando and more), Hawaii, Vail & Aspen Colorado.
Benefits of Buying a Condotel
Right from the start you should be thinking of a condo-tel as an AirBnb concept. You rent out your unit on a short-term basis and enjoy the income benefits of a unit that can now fetch as much as 4x the regular rent if you had leased it as a long-term rental. The location is the determining factor, so always do your own diligence.