A beach-view listing with built-in rental income? Buyers love it. Brokers… not always. Condotels can be a smart investment, but when it comes time to finance one, most traditional lenders back away fast.
Why? Because condotels don’t fit into a conventional loan box. And that’s exactly where LendSure’s condotel funding program can give you a competitive edge.
What Makes Condotels So Different?
A condotel (short for condominium hotel) looks like a condo but acts like a hotel. You’ve got short-term rentals, daily housekeeping, front desk check-in, resort-style amenities, the works. It’s great for second home buyers and investors, but it’s not for lenders who only deal in standard residential properties.
That’s why condotel funding isn’t available through most big banks or conventional programs. Instead, you need a Non-QM solution, one that knows how to navigate layered property reviews, alternative income documentation, and stricter underwriting guidelines.
And here’s the thing: that demand is only growing. With nearly 58 million Americans now self-employed, and Non-QM loans making up nearly 30% of non-agency mortgage-backed securities, more borrowers are turning to lenders who can handle unique property types like condotels.
Where Most Deals Get Stuck
Condotel funding comes with a few quirks that can catch brokers off guard. Here are the four most common ones:
- Building red flags
Some properties simply don’t qualify for condotel financing. These include buildings that restrict owner occupancy, require rental pooling or management agreements, or operate non-residential businesses on-site, such as restaurants, spas, or gyms. Timeshares, common interest apartments, and multi-unit setups held under a single deed are also off the table. Additionally, units without a full-size kitchen are typically ineligible.
- Stricter loan terms
Many lenders limit LTV, require higher FICO scores, or just make the process harder than it needs to be. If you’ve ever had to explain a 40% down payment to an eager buyer, you know the pain. LendSure’s guidelines give you more flexibility and more room to compete.
- No primary residence option
Condotels are limited to second home or investment use, so you’ll need to structure the deal accordingly. That often means larger reserves and tighter ratios, but it also means opportunity if you know where to look.
- Income docs that don’t fit the mold
Self-employed borrowers often don’t have the W-2s or tax returns that traditional lenders want. That’s where a strong bank statement program can make or break the deal.
Top Tips for Making Condotel Deals Go Smoothly
Once you’ve got a qualified borrower and an eligible property, it’s all about keeping the momentum. Here are a few ways to help ensure your condotel deals stay on track:
- Set expectations early
Walk your client through what makes condotel funding different from a standard mortgage loan. The more they understand upfront, the fewer surprises, and the easier it is to keep them engaged through closing.
- Confirm how your borrower plans to use the unit
Will it be an occasional vacation spot? A full-time rental? Something in between? Having a clear picture helps you structure the deal correctly from the start and flag any eligibility issues.
- Double-check amenities and ownership rules
As mentioned earlier, some projects forbid owner occupancy or have a percentage of their units operated as timeshares. Catching this early helps the lender understand what they are dealing with up front so they can structure the deal properly.
- Lean on your lender’s team
Work with a lender (like LendSure) that has experience in this space and can guide you through the building review, documentation, and pre-qual process quickly and clearly.
Why LendSure Makes Condotel Funding Easier
As we’ve said, most lenders overcomplicate condotel funding, or avoid it altogether. At LendSure, it’s one of our many Non-QM loan specialties.
Instead, you get common-sense guidelines, fast answers, and support from people who know how these properties work. Whether your borrower is self-employed, investing in a beachside unit, or refinancing something they picked up years ago, we’ve got flexible options to help you close the deal.
Here’s what you’ll get with condotel funding from us:
- Up to 75% LTV for purchases, more leverage for buyers who don’t want to drain their reserves.
- Refi options, 70% LTV for rate-and-term, 65% for cash-out.
- Industry-leading Bank Statement loan program, ideal for business owners and high-cash-flow borrowers.
And the real win? We don’t drag out pre-quals. You’ll get a clear answer, usually within 24 hours, so you can keep your borrower engaged and ready to move.
The LendSure Way
It’s simple. We make loans that make sense. We’re not in-the-box lenders. Of course, there are ratios, and data to consider, but we know that behind every file, there’s an individual with a unique circumstance seeking a loan. We work hard to offer our common-sense take on lending to borrowers seeking funding for the home of their dreams, another addition to their investment property portfolio, or refinancing of a currently-owned property.
Are you ready to benefit from a commonsense approach to lending? Contact us today to learn more about non-QM loans and how partnering with LendSure Mortgage Corp. can help grow your bottom line.
