This Article Is About Condo Hotel Mortgage Loans
Condotel or condo-hotel units are condominiums in a hotel or a rental condominium complex with a front desk. A percentage of the condominium units in a hotel complex are dedicated to private ownership. Condotel owners can use their condominium units as primary homes, second homes, or investment homes. Second-home condotel unit owners can rent out the units when they are not using them.
Rentals can range from daily, weekly, and monthly. The condo-hotel unit owner can rent the condotel or the owner can rely on the condotel complex association. The HOA normally will do a revenue split for renting and maintaining the condotel unit. There are only a few mortgage lenders that specialize in Condo Hotel Mortgage Loans. Condo Hotel Mortgage Loans are portfolio loans and have very strict lending guidelines. I specialize in Condo Hotel Mortgage Loans nationwide. I will be covering the newest condo hotel mortgage loans updated mortgage guidelines that is currently updated and in effect. In this article, we will discuss and cover the mortgage guidelines for condotel financing.
Condotel Unit Requirements
Our condo hotel mortgage loans require a condotel have at least one bedroom and a functional kitchen in order for them to consider financing a condotel unit. The condotel portfolio lender would like to see a minimum of at least 500 square feet. The condotel project cannot have any litigation going on. Must not have any pending major violation issued by the county’s building department.
Gustan Cho Associates requires condotel projects to be structurally safe. The condotel project cannot be financially distressed and have sufficient reserves.
Credit Requirements
There are strict requirements for condo-hotel mortgage loan borrowers. Minimum credit scores requirements apply. We require borrowers to have at least a 680 FICO credit score. Those who have lower than 680 credit scores would have to wait until they can boost their credit scores to 680. There are no exceptions.
Cash Reserve Requirements For Condotel Loans
We require borrowers to have at least one year’s reserve for the subject property as well as other properties they own. For example, if the borrower has a single-family home in California and wants to purchase a condotel unit in Florida, we require the borrower have one year’s reserve of principal, interest, taxes, and insurance for both the principal residence as well as the subject condotel’s proposed purchase. Reserves are one month’s principal, interest, taxes, insurance, and HOA payments. Only 3 months of the reserves need to be in cash.
The balance can be in retirement funds, and/or securities.
NON-QM Loans And Bank Statement Mortgage Loans For Self Employed
For real estate investors who are interested in short term financing and are interested in a quick private money loan and have a 35% down payment Gustan Cho Associates offers the following:
- Short Term Hard Money Rehab Loans
- Bank Statement Mortgage Loans For Self Employed Borrowers
- No Doc Fix And Flip Rehab Loans
- No Doc Short Term Rehab Loans
- Commercial Lines Of Credit For Real Estate Investors
- All Types Of Commercial Financing
Mortgage rates have gone up nine weeks in a row.
- FHA mortgage rates were 3.25% just a little over a month ago and now it is at 4.5%
- Conventional mortgage rates were at 3.5% and now are almost at 5.0%
- Condotel mortgage rates have also gone up
- 7/1 ARM condotel mortgage rates were trading at the 5.25% mark for second homes but now they are trading at 5.625% amortized over 30 years
In this article, we will discuss and cover Condotel Mortgage Rates Rise On Adjustable Rate Mortgages.
Condotel Mortgage Programs
We offer condotel mortgage loans in California, Illinois, and Florida.
- If the condotel unit is located in other states, please contact us at Gustan Cho Associates
- Gustan Cho Associates will refer condotel lenders who specialize in condotel financing in your state
- Condotel mortgage programs that are available in today’s market are mainly Adjustable Rate Mortgage products, also known as ARM products
- Condotel mortgage loans are portfolio loans
- Portfolio loans mean the lender holds and services the condotel mortgage loan
- Portfolio lenders do not sell it to the secondary market
- 15 year and 30 year fixed rate condotel mortgage loans are nonexistent that I know of
- There are 3/1 ARM, 5/1 ARM, and 7/1 ARM condotel mortgage loan products that we offer
- They are all amortized over 30 years
- Minimum loan amounts start at $100,000 up to $3,000,000
There is no prepayment penalty.
Condotel mortgage rates
Condotel mortgage rates start at 5.25% on a 3/1 ARM program.
- Condotel mortgage rates for a 5/1 ARM is set at a starter rate of 5.5%
- Condotel mortgage rates for a 7/1 ARM start at 5.625%
- The index is based on the Cost Maturity Treasury and the margin is set at 3.0%
After the initial rate period expires, the new adjustable mortgage rate cannot be lower than the starter rate.
Condotel Mortgage Loan Guidelines
Basic condotel mortgage loan requirements are as follows:
- The borrower needs a minimum credit score of 680 FICO
- Maximum debt to income ratio of 40% including the new condotel purchase mortgage loan
- Minimum 75% loan to value on condotel purchase loans and condotel refinance loans for primary and second homes
- 60% loan to value on investment condotel mortgage loans
One year reserves for new condotel purchase and any real estate owned.
Condotel Unit And Condo Hotel Requirements
Condo Hotel complex needs to be in good financial and structural condition. A one-page condotel questionnaire form needs to be completed by the Condotel Homeowners Association manager which consists of whether the condo-hotel complex has pending litigation and/or any major building violation issues.
Condotel unit must have at least one bedroom and a functional kitchen.
The condotel complex nor its subsidiaries cannot be under bankruptcy protection nor have pending litigation.
Contact Gustan Cho Associates Today
Condotel unit buyers and commercial real estate investors who have any questions on Condotel Financing and/or commercial loans, please contact us at 800-900-8569 or text us for a faster response. Or email us at gcho@gustancho.com. Real Estate Investors and homebuyers can also subscribe to our newsletter at www.gustancho.com
