Difficulty In Condotel Financing?
A condotel condominium unit is a condominium unit within a hotel complex or a condominium project that has a rental desk or rental office in the lobby of the complex. Condotel units were extremely popular back in the 2000’s where many banks and mortgage companies were eager to finance condotel units. After the 2008 Real Estate and Mortgage Meltdown, condotel financing came to an abrupt halt. Almost all banks and condotel financing lenders stopped lending on condotel units. Condotel unit owners who owned condotels and wanted to sell their condotel units had the most difficult time in selling their units because the condotel buyers could not get financing. Condotel buyers were limited to cash buyers only due to lack of condotel financing. Many folks who wanted to purchase condotel units as second homes could not think of purchasing a condotel unit because they could not come up with cash funds. Due to the lack of available financing for condotels, condotel unit prices started tumbling nationwide. Many condotel unit owners could who purchased their condotel units in the mid 2000’s could not sell their condotel units and could not get them refinanced even with their current condotel mortgage lenders. No matter how good of a banking relationship the condotel unit owner had with their condotel mortgage lenders, their mortgage lenders would not refinance their condotel loan that they were already servicing.
Condotel Financing Now Available
Condotel unit owners are now in luck. Condotel Financing is back. Condotel Financing are 30 year portfolio adjustable rate mortgage loans. 3/1 ARM, 5/1 ARM, and 7/1 ARM mortgage loan programs are now available. The index is based on the one year treasuries ( Cost Maturity Treasury CMT ) and the margin is set at 3.0%. The condotel complex needs to qualify as well as the condotel mortgage loan applicant.
Condotel Unit Requirements
For a condotel unit to qualify for condotel financing, the condotel unit needs to be at least 500 square feet, have at least one bedroom, and have a full kitchen. The condotel complex needs sufficient reserves and the condo complex cannot have any major litigation going on or have any major building violation issues. Not more than 10% of the condotel units can be in foreclosure.
Condotel Financing Requirements
To qualify for condotel financing, the condotel mortgage loan applicant needs at least a 680 FICO credit score, have one year reserves for the borrowers primary residence as well as the proposed condotel principal, interest, taxes, and insurance, cannot exceed 40% debt to income ratios, and require a 25% down payment. The 25% down payment on a condotel purchase loan is for first and second home condotel units only. For condotel unit buyers who have two properties and the proposed condotel purchase is the third property they are purchasing, then the condotel purchase is considered a investment condotel purchase and a 40% down payment is required. If you have any questions about Condotel Financing, contact Gustan Cho at Gustan Cho Associates at 262-716-8151 or email Gustan Cho Associates . Gustan Cho and his associates are available 7 days a week, evenings, as well as holidays to answer all of your questions.