Condotel Financing Available!

Mortgage and Lending with Waterstone Mortgage Corporation

I have been getting a LOT of calls about financing condos in our area and throughout the Southeast.  At this point, we have been told that if any of the following are present, the project is considered a "condotel": 

  • If an underwriter can Google the name of the project and the city and finds that they can rent a unit for a short term there (ie: a day or a week), they are considering that project a condotel; 
  • If the project has the word "Resort", "Inn", "Hotel" or "Motel" in the legal name, it is being considered a condotel; 
  • If a project offers maid or concierge services, it is being considered a condotel; 
  • If a project has an on-site rental desk, it will be looked at as being a condotel. 

Please keep in mind that a project only has to have ONE of the above characteristics in order to be considered a condotel, not all of them!  Do you know of more than a handful of projects in the Destin/Panama City Beach/Ft. Walton Beach market that do NOT have one or more of these characteristics??!! 

Here at Northstar Mortgage Group, we are very aware of the frustrations you, as Realtors, are dealing with in getting buyers financed for condo projects in our local market and we have found solutions for you and for your buyers.  We have made efforts to find portfolio lenders (lenders who won't sell the mortgages on the secondary market) and have come up with some that can offer the following financing for condotels: 

  • Second home financing on 3, 5, 10 year ARMs or 10 and 15 year fixed rate mortgages with 25% down; 
  • Investment financing on 3, 5, 10 year ARMs or 10 and 15 year fixed rate mortgages with 35% down; 
  • Up to 100% financing as second home or investment property with additional collateral (lendable equity in other property owned; we can put as many as 4 properties on one mortgage to accomplish this).   We would need to speak with the buyer to determine if they have "lendable equity" and determine the maximum loan to value based on other property that they own to determine if this is an option for them. 

If the project has either or both of the following features, the down payment required will be 45% but we can still do financing: 

  • Less than 750 square feet (excluding balcony) and/or 
  • Doesn't have a full kitchen (must have full size refrigerator, full size stove/oven and full size sink). 

If any one or more of the following features are in the project, we can not do financing except with special exception for low loan to value and/or if additional collateral is pledged: 

  • Managed by national hotel chain;  
  • Owners are REQUIRED to participate in a rental pool; 
  • Homeowner's Association is controlled by the developer and not the unit owners; 
  • Project has timeshare or fractional ownership units in it. 

If you are leery of listing a condo unit because you are unsure of the available financing, please feel free to call us and see if we will be able to help with any prospective buyer.  If you have a buyer and feel as if you are beating your head against the wall with the financing, please feel free to call us, as well! 

The investors we are using do have a maximum exposure that they will do in each project and we have a list of projects that they are already maxed in and can help you before you write an offer/take a listing to make sure we can do financing in a particular project.  Feel free to call me to find out if you have a listing or a buyer to make sure we can do the project they are buying/selling. 

Please do not hesitate to contact me with any questions or to have your buyers contact us for financing on condotels!  We can finance condotels in Florida, Alabama, Georgia, North Carolina and South Carolina.



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Lynn Boyd
The Payne Group - Keller Williams Success Realty - Panama City Beach, FL
Realtor - Your Panama City Florida RE Specialist

Great information Sue!  I will refer to your post with my future condo buyers.  Thanks!

Jun 21, 2009 09:17 AM #1
John Moran
Keller Williams Realty's At The Beach Team - Destin, FL

Sue any new info on Condotel financing that would be good news to those interested in buying Destin Condos For Sale, 30A Condo For Sale or Panama City Beach Condos For Sale?

Nov 17, 2009 12:49 AM #2
Payam Bakhaje
Long & Foster Realtors - Washington, DC
Licensed in DC, MD and VA

Do you serve Washington DC as well? I have two condo that I need to get them pormoted for financing and they are not going to go with FHA since the rental Ratio is high. Please let me know.

Jan 18, 2011 07:35 AM #3

very helpful info...i own a unit like you describe in atnatic beach nc. are any of these lenders willing to work with a nc property?

Mar 20, 2012 10:46 AM #4
Jim Galloway



Can you help regarding information on CONDOTEL financing in MN?  How many days can it be rented before the project is considered a Condotel?  I thought weekly rentals were good, 3 days or less would make it a condo tell... can you confirm financing info for condos in MN, thanks



Apr 07, 2013 11:52 PM #5
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Sue Botelho

USDA Rural Housing Mortgage Pro
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