A lot of buyers ask, “What is a Condotel?” 

To keep it basic, it’s a condo project that allows nightly rentals. There may be a few mainland portfolio lenders out there that may not call every project like this a Condotel, but it normally comes with much stricter guidelines. You also end up holding your breath for most of the transaction as their condo department reviews the project amenities and online Google results to make a “final determination”. Then just when you might think you are in the clear, the additional review when the appraisal comes can cause a denial and you will be standing on the 5 yard line with no time left on the clock. I have found that it is just best to make sure you are dealing with a Condotel lender who closes Condotels often.

Here are some of the other common questions I get as a condotel lender:

“How much do I have to put down on a Condotel?” - The answer you will hear the most will be a quick 30% down and that’s where you will get the best rate, but we have options with as low as 20% down.

“Can I call it a second home or do I have to call in an investment?” - This just depends on the source that the loan officer is using and what is marked on the contract, we have Condotel programs with as low as 20% down for both occupancies. 

“Can I hold title in an LLC?” - Yes there are options for this with 30% down

“Do I need 2 years of tax returns if I am self-employed?” – for the best rate, yes you do, but we have a few other Condotel programs that don’t require 2 years of tax returns for the self employed 

“Are there alternative ways to document income?” – yes we can finance Condotels with 1 year of tax returns, 12 months of bank statements, or even without looking at employment at all as long as the potential rental income stated by the appraisal covers the monthly mortgage payment.

“What type of products do you offer” depends on the program you need to go with to get approved but if you are well qualified and have 30% down you should have all Fixed and ARM products available to choose from. (30,20,15 fixed and then 10,7,5,3 year ARMS)

If you are wanting to purchase a Condotel, its best to start by calling me to get pre-approved so you know what you qualify for and can start budgeting.  Aloha!