Non-warrantable condo and condotel loans.
DSCR financing for condos conventional loans won't touch. Up to 80% LTV on condos, warrantable or not, and up to 75% on condotels.
The loan qualifies on the unit's rent, not your income.
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What is the loan for?
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Program snapshot
- Condo LTV
- Up to 80%
- Condotel purchase
- Up to 75%
- Condotel refinance
- Up to 65%
- Non-warrantable
- Yes
- Tax returns
- Not needed
- Foreign investors
- 70%
What you get
- Warrantable and non-warrantable condos
- Condotels and hotel-style condo projects
- Qualify on the unit's rent, long-term or nightly
- Up to 80% LTV on condos
- Close in your name or an LLC
- Foreign nationals welcome, no SSN
Term sheet
Same day
Who it's for
- Buying a condo in a project a bank declined
- Buying a unit in a condotel or resort building
- Refinancing a condo rental out of a short-term loan
- A foreign national buying a U.S. condo
What is a non-warrantable condo?
A non-warrantable condo is a unit in a project that doesn't meet Fannie Mae and Freddie Mac standards, so a conventional loan won't finance it.
Common reasons: pending litigation, a large share of commercial space, one owner holding many units, or hotel-style operations.
A DSCR loan looks at the unit's rent instead, so these condos still finance.
What makes a project non-warrantable
- Litigation involving the association or the developer
- Too much commercial or mixed-use space
- One owner or entity holding many units
- Hotel or motel operations
- Critical repairs the building needs
- Timeshare or split-ownership units
From Fannie Mae's list of ineligible projects.
What is a condotel?
A condotel is a condo unit in a building run like a hotel: front desk, short stays, often a rental program managed by the hotel.
Most banks won't lend on them.
DSCR lenders do, with lower leverage. Up to 75% LTV on a purchase and 65% on a refinance or cash-out. Loan sizes are capped lower than a standard condo.
Leverage by unit type
- Condo, warrantable or not
- Up to 80%
- Condotel purchase
- Up to 75%
- Condotel refinance or cash-out
- Up to 65%
- Foreign nationals
- Up to 70%
Subject to underwriting and the project review.
What the lender reviews
Besides the unit, the lender reviews the project: the HOA budget and reserves, any litigation, special assessments and the insurance.
Order the HOA questionnaire early. It is often the slowest document in a condo closing.
The questionnaire is a form the association or its management company fills in: owner-occupancy, rentals, commercial space, litigation, reserves and insurance.
Most charge a fee and take days to weeks to return it.
Florida condos: inspections and reserves
Florida condo buildings three stories or taller need a structural milestone inspection by the end of the year they turn 30, then every 10 years.
The association must also complete a structural integrity reserve study at least every 10 years and fund the reserves it identifies.
Lenders read both. A building behind on either can turn a warrantable condo non-warrantable.
From request to funded
Send the deal
Unit address, price and the project name.
Same-day term sheet
Rate, leverage and the project documents needed. No hard credit pull.
Project review and close
HOA questionnaire, appraisal, title and closing.
Frequently asked questions
Can I get a loan on a non-warrantable condo?
Yes. DSCR loans finance non-warrantable condos, up to 80% LTV. The loan qualifies on the unit's rent, not your income.
What is the maximum LTV on a condotel?
Up to 75% on a purchase and 65% on a refinance or cash-out. Foreign nationals up to 70%.
Can a condotel unit be rented nightly?
Yes. That is how most condotels earn their income. The lender qualifies the loan on that rent.
Can foreign nationals finance a condo or condotel?
Yes. Up to 70% LTV, no SSN or U.S. credit required.
What makes a condo non-warrantable?
A project that misses Fannie Mae and Freddie Mac standards: litigation, too much commercial space, one owner holding many units, hotel operations or critical repairs.
What is an HOA questionnaire?
A form the condo association fills in for the lender: occupancy, rentals, litigation, reserves and insurance. Order it early. It is often the slowest document in a condo closing.
Is a condotel the same as a timeshare?
No. A condotel buyer owns the whole unit. A timeshare sells shares of time in a unit, and these loans don't finance timeshares.
Do Florida condos have extra rules?
Yes. Buildings three stories or taller need milestone inspections from age 30 and a structural integrity reserve study at least every 10 years. Lenders review both.
Does the minimum DSCR change for condos?
It can. Some programs want a DSCR of 1.0 or higher on condos and condotels. Your term sheet shows the requirement for your unit.
Sources
- Fannie Mae Selling Guide B4-2.1-03: ineligible condo projects
- Fannie Mae Selling Guide B3-3.1-08: rental income and the Form 1007 rent schedule
- CFPB, Regulation Z section 1026.3: business-purpose credit
- Florida Statutes 553.899: milestone inspections
- Florida Statutes 718.112: structural integrity reserve studies
Related
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