Condotel Mortgage Loan Programs
Condotel mortgage loan programs are a type of loan program that provides financing for the purchase of a condo-hotel, which is a combination of a condominium and a hotel. It is important for borrowers to understand the key aspects of these loan programs before applying for financing.
Condotel Mortgage Loan Highlights
Property Types Allowed: Condotel mortgage loan programs generally only apply to properties that have been designated as condotels. A condotel is a condominium building that is operated like a hotel, with amenities such as maid service, room service, and a front desk staff. These properties are often located in popular vacation destinations, such as beach towns or ski resorts.
Maximum LTV: The maximum loan-to-value (LTV) ratio for condotel mortgage loan programs is typically lower than for traditional mortgage loans. Lenders may require a down payment of 20% to 30% or more, depending on the specific loan program and the borrower's financial situation. This is because condotels are considered riskier investments than traditional condos, due to their dependence on rental income and occupancy rates.
Interest Rates: Condotel mortgage loan programs may have higher interest rates than traditional mortgage loans, due to the increased risk associated with condotel investments. Borrowers should be prepared to pay a higher interest rate, which could increase their monthly mortgage payments.
Financing Terms: Condotel mortgage loan programs may have different financing terms than traditional mortgage loans. For example, some lenders may require that the borrower sign a rental management agreement, which gives the hotel management company the right to rent out the unit when the owner is not using it. Borrowers should carefully review the terms of the loan program before signing any agreements.
Rental Income: Borrowers should be aware that rental income from a condotel unit may be used to qualify for the loan, but lenders may require a certain level of rental income to be generated before the loan can be approved. Additionally, rental income from a condotel unit may be subject to fluctuations due to changes in occupancy rates or hotel management policies.
In summary, borrowers should understand that condotel mortgage loan programs are designed specifically for condotel properties, which are operated like hotels. These loan programs may have stricter requirements, including higher down payments and interest rates, and may require rental management agreements. Before applying for a condotel mortgage loan, borrowers should carefully review the loan terms and their ability to generate rental income from the property.
DSCR Loan Program Terms:
- Up to 85% LTV Purchase
- Up to 75% LTV Cash Out
- 600 Min FICO
- No Employment or Income Verification
- Close in an LLC
- Up to $5M Loan Amount
- DSCR Values from 0.00 and Up
- Short Term Rental Income Eligible