Can you get financing on a condotel?

Yes, You Can Get Condotel And Non-Warrantable Condo Loans Rates typically run a half-percent higher than for a comparable conventional mortgage, and minimum downpayments start at 20 percent. Beyond that, however, getting an approval is simple.

What is a condotel financing?

Condotel Mortgage / Condo-Tel Financing / Condops A condominium project that is operated as a hotel with a registration desk, cleaning service and more. The units are individually owned. Unit owners also have the option to place their unit in the hotels rental program where it is rented out like any other hotel room.

What does non-warrantable condo mean?

When a condo is labeled as non-warrantable, it means that it does not meet conventional guidelines and will not be bought by government-backed entities like Fannie Mae and Freddie Mac. Many lenders consider financing a mortgage for this type of property to be too risky which can make it harder to finance.

How much do you have to put down on a hotel?

While choosing to pay for a hotel outright with cash is always an option, most buyers want to finance this kind of purchase. To buy a hotel, our hotel brokers at Southeast International recommend a down payment be 20-25% of the hotel’s purchase price.

Can you live in a condotel?

(Villas and other free-standing residences are often called “fractionals,” but to keep things simple, I’ll use the term “condotel.”) The bottom line is that condotel buyers own a real piece of property — one they can live in or rent out, as they please.

Why are condos higher risk?

Essentially, lenders will not finance the purchase of condo units if the project as a whole looks like a risky investment. Higher vacancy and fewer owners living in the project mean that each unit pays a bigger share of the association dues, making the whole project more likely to fail if just a few owners default.

What kind of loan do I need to buy a hotel?

For most hotel financing needs, the SBA 504/CDC loan program will be your best bet. Business owners that need to access hotel construction loans, commercial real estate financing, or financing for a large piece of equipment should consider this their top option.