Condo-tel Financing in Florida
Condo-tel financing in Florida can be tricky! Not all lenders or brokers will do it. We however have multiple outlets that we can finance condo-tels through. There are a few caveats between the different outlets but the main principles are the same. We will break it down for you.
Condo-tels can be a great investment property, second home, or even a primary residence, but first, what exactly is a condo-tel? A condo-tel is essentially a mix between a condominium and a hotel. Hotel like amenities can be expected but you have ownership like a condominium. Additionally the management company of the community can offer to rent your unit out when its not in your own personal use! This can provide additional income and subsidize the cost of your vacation home. 
Oftentimes amenities can include a pool, water park, bar, game room, a lazy river and more! The convenience of letting the management of the community keep your unit generating cash flow and maintaining the unit is a hassle-free way to enjoy your condo-tel in Florida. Orlando, Miami, Sarasota, Fort Walton Beach and surrounding areas all have condo-tels worth any shoppers attention.
The big question is how much do I need down? Here is the breakdown. With a 660 or higher credit score you will need 25% down. If its less than 660 30% down will be needed.
Basic Requirements to finance a condo-tel in Florida
- Construction must be complete for the phase you are purchasing in.
- Leasehold communities are allowed if the lease is 30 years or longer, for investment properties 15 years is the minimum.
- No structural deficiencies.
- A questionnaire must be completed by the owners association.
- Kitchens are typically required, but a kitchenette may be acceptable if there is a built in cook top.
- If the unit is less than 500 square feet then the minimum down is 30%.
- Co-insurance is considered on a case by case basis.
- Certain pending litigation might disqualify the community.
What kind of income do I need to show?
There are different methods for qualifying that your income is sufficient to finance a condo-tel in Florida. We can use tax returns like traditional financing, or bank statements if you are self employed. If you are buying it as an investment property we can even use what’s called debt service coverage ratio financing to qualify.
What is the draw back to buying a condo-tel in Florida?
Interest rates can be higher on these loan products depending on what income you plan to use to qualify. If you are using tax returns to qualify we have very competitive rate options in line with market rates. When using bank statements or other unconventional methods you can expect a higher than market interest rate. Keep in mind that you are locking yourself into one community when buying a condo-tel! There are however ways to exchange time with other vacation home owners in other communities to give you some flexibility on your vacation destination! Also remember that when the community manages renting your unit out they will charge a fee or a percentage to do so.
