Combining Vacation and Investment

Condotel Mortgage Loan Highlights

• Property Types Allowed: Condotel mortgage loan programs generally only apply to properties that have been designated as condotels. A condotel is a condominium building that is operated like a hotel, with amenities such as maid service, room service, and a front desk staff.
• Maximum LTV: The maximum loan-to-value (LTV) ratio for condotel mortgage loan programs is typically lower than for traditional mortgage loans. Lenders may require a down payment of 20% to 30% or more.
• Interest Rates: Condotel mortgage loan programs may have higher interest rates than traditional mortgage loans, due to the increased risk associated with condotel investments.
• Financing Terms: Some lenders may require that the borrower sign a rental management agreement, which gives the hotel management company the right to rent out the unit when the owner is not using it.
• Rental Income: Rental income from a condotel unit may be used to qualify for the loan, but lenders may require a certain level of rental income to be generated before the loan can be approved.

In summary, borrowers should understand that condotel mortgage loan programs are designed specifically for condotel properties. These loan programs may have stricter requirements, and borrowers should carefully review the loan terms and their ability to generate rental income from the property.