Florida Condo Hotel Financing

This BLOG On Florida Condo Hotel Financing Was Updated On October 28th, 2018

Condominium buyers who are in the market for a Condo Hotel in Florida, they may run into challenges in finding Condo Hotel Mortgage Lenders. Most Florida Condo Hotel Financing lenders who used to finance Condo Hotels in Florida have stopped lending on Condotels.

Banks like J.P. Morgan Chase, Wells Fargo, Citibank, and Bank of America used to be Florida Condo Hotel Financing Lenders but have completely stopped
Although you might have your Condo Hotel financed through their banks, they are likely not to refinance your Condo Hotel
Most Condo Hotel owners have given up on financing a Condo Hotel or refinancing their Condotel.
Good news is that Condotel Financing is back

The Team at Gustan Cho Associates are experts in condotel financing as well as other alternative lending and non-qm loan programs. Condotels and other alternative lending loan programs close in 21 days or less.

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Florida Condo Hotel Financing Is Back After 2008 Mortgage Meltdown

Condo Hotels is very popular in the state of Florida and always has been.

The condotel market used to be very strong in Florida until the subprime meltdown back in 2008
Then due to lack of Florida condo hotel financing, condotel units took a major turn for the worse and dropped in value
Many people still want to own condotels
However, due to the tough financing standards, they cannot afford the 25% down payment
Condotels make popular second homes
The great part about condotel ownership is owners can make substantial income when not using it
A major hurdle why we do not have many more Condo Hotel investors is due to the fact that Condo Hotel Financing has almost become extinct
Only a handful of lenders, myself included, can finance Condo Hotels in Florida
Many sellers are aware of the scarcity of Condo Hotel Financing that most of them will only entertain cash offers
Borrowers can now qualify for a mortgage on Condo Hotel purchase and your Condotel Refinance
75% Loan To Value On Condotel Refinance Mortgage Loans on condotels that are primary and/or second homes

60% Loan To Value On Condotel Refinance Mortgages on condotels that are investment properties.
Speak With Our Loan Officer for Get Condo Hotel Loans

Florida Condo Hotel Financing Requirements

Here are the basic Florida Condo Hotel Financing Requirements:

Condotel needs to be at least 500 square feet with at least one bedroom and fully functional kitchen
Minimum loan amount $100,000
25% down payment requirements for primary homes and second homes
40% down payment required for borrowers who have two or more properties and need condotel financing as an investment home

One year reserves for primary home and any other real estate held by the borrower:

Reserves do not have to be in cash
Can be retirement, stocks & bonds, and other forms of assets

Adjustable Rate Mortgages: 3/1 ARM, 5/1 ARM, 7/1 ARM; Index based on CMT and margin set at 3.0%.

A Condotel, also referred to as a condo-hotel, is a condominium unit in a hotel complex that is owned individually by private owners.

Condotels used to be extremely popular during the early 2000s until the 2008 Real Estate and Mortgage Meltdown
After the 2008 real estate meltdown, condotel financing completely came to an abrupt halt
Many lenders such as JP Mortgage Chase, Bank of America, Citibank, US Bank, and other large national lenders used to finance condotels and non-warrantable condos
After the real estate market crash of 2008, all national banks stopped lending on condo-hotel units
Most condotels are waterfront properties and/or are located in resort areas
Florida is the birth of condotels
Condotel units are starting to become more in demand due to available condotel financing and the ease of Florida Condotel Financing Mortgage Lending Guidelines
Alexander Thomas Carlucci is a veteran loan officer and expert who specializes in helping buyers of condominium units in the state of Florida
Alex Carlucci is also an expert in non-warrantable condominium financing
Alex Carlucci can assist with Florida condominium unit buyers in financing their potential purchase

Alex is an expert on Florida Condotel Financing Mortgage Lending Guidelines.

Benefits Of Condotels

Condo Hotel units are becoming more and more popular:

This is because condo-hotel units are maintenance-free
The condominium complex homeowners association manages the individual units in lieu of the monthly homeowners association fees
Many unit owners can rent out their condo units when they are not occupying it
The homeowners association will rent the units out in return for a percentage of the revenue
Many unit owners do get a positive cash flow by renting their units and still enjoying the units throughout the year
It is like having a vacation home for free where the revenues of the unit pay for the mortgage payments and expenses.

Florida Condotel Financing Mortgage Lending Guidelines And Requirements

Condo Hotel mortgage loans are portfolio loans:

This means lenders hold the mortgage note in house in their portfolio
Up to now, most condotel unit buyers did not access to financing
The great news is financing is back

Buyers who dreamed of buying a condotel unit as a second home, vacation home, or investment home can now have the opportunity to purchase a unit with financing available.

Eligibility Requirements And Guidelines

Here are the financing requirements for primary and second-home buyers.

The condotel unit needs to financially sound with no pending litigation or major building violation
The condotel unit needs to be at least 500 square feet
Have a least one bedroom
Full kitchen (kitchenettes are not allowed)
Minimum loan size is $100,000 and the maximum loan size is $3 million
25% down payment, 75% loan to value, is required for primary and second condotel unit buyers
40% down payment, or 60% loan to value is required if the unit is an investment property and unit buyer has two or more properties
Borrowers need a minimum 680 Credit Score
Maximum debt to income ratios cannot exceed 40% DTI
No prior bankruptcies, foreclosures, deed in lieu of foreclosures, a short sale in the past 4 years

Buyers with a prior bankruptcy, foreclosure, deed in lieu of foreclosure, a short sale will need a letter of explanation as of the extenuating circumstances:

Extenuating circumstances acceptable for bankruptcy and/or foreclosure include medical issues, loss of job, and divorce

Foreign Nationals can qualify for financing as long as they have a work visa and are employed either by a U.S. Company and/or a subsidiary of a U.S. Company with no credit scores required. We will help foreign nationals establish credit. Special program for foreign nationals where we offer and assist with auto financing, credit cards, and other forms of credit to foreign nationals.

About The Author Of Florida Condotel Financing

Alex Carlucci is a contributing writer for Gustan Cho Associates. Alex is a veteran Florida Condotel and Non-Warrantable Condominium mortgage loan officer. Alex is familiar with all of the major condotel complexes in the state of Florida as well as new Condotel development projects not just in the Orlando Area, but throughout the state of Florida.

Home buyers interested in purchasing a condotel unit or non-warrantable condominium in Florida, please contact me at 800-900-8569 or text us for faster response. Or email us at gcho@gustancho.com.