Mortgage Blog

Condotel Mortgage

Many people are surprised when they find out the home they are considering purchasing is a condotel. These units are specifically classified and require a non-warrantable condo mortgage. However, a condotel mortgage isn’t your run of the mill mortgage, you need to find a lender who understands the unique aspects of these types of loans.

What is warrantable?

A warrantable condominium is one that meets specific guidelines set down by Fannie Mae (FNMA) for condominium financing. In most cases, most of the units are owner-occupied, the units are not primarily second or vacation homes and the homeowner’s association is largely controlled by the home owners association.

Why are condotel’s unwarrantable?

Many people do not understand, until they apply for a condotel mortgage, that they are difference than a traditional condominium. This is because they do not meet the guidelines that FNMA has laid out for condo financing. Frequently, condotels are purchased by investors as a second home that allows them to rent their property out when they are not using it. These rentals may be daily, weekly or monthly and may extend for longer periods of time. Most of the units are not owner occupied, meaning they do not meet the basics of FNMA approved financing.

Finding lenders for condotels

Many banks offer FNMA loans since they pose less risk for them. Many lenders believe that loans not backed by FNMA are too risky and therefore will not get involved in condotel financing. Not only does this mean that finding a condotel mortgage is challenging, it also means you are likely to pay a higher interest rate and have to make a larger down payment. Fortunately, Core Mortgage Financial is a leader in condotel financing. We understand the condotel market and we are happy to work with those interested in buying a condotel or refinancing a condotel.


When you need a condotel mortgage it is important to understand the current limitations. Most lenders require 20 percent down payment on purchases. In addition, these non-warrantable condo mortgage loans are available only with adjustable rates. There are various programs, including a 3/1, 5/1 or 7/1 adjustable. At Core Mortgage Financial, we’ll help you get the condotel mortgage that works best for you.


This blog is for informational purposes only. Rates, programs, guidelines are subject to change without notice. NMLS #1743702


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