Refinancing an existing mortgage that is either a Federal Housing Administration (FHA) or Veterans Administration (VA) loan it is far simpler than a property that currently has a conventional mortgage. The main reason is that in most cases it will not require a project approval of the Homeowners Owners Association. But the situation may not be hopeless, even if you have a “condotel”.
Non agency portfolio products are a great option for someone who has a condo with a mortgage that is not FHA or VA. A portfolio product is a mortgage that a company will hold and service, giving them more flexibility in the underwriting requirements. Examples of this flexibility are: a loan to value up to 90% without mortgage insurance, projects up to 8 stories may be acceptable, etc. While project approval will still be a consideration, the guidelines are often less stringent than required to for other mortgage options.
A “condotel” is a building that is used both as a condominium and a hotel, which are popular in resort areas. Condotels are characterized by a “front desk” to rent the unit out when the owners are not using it. They are different than a time share because the owner is not restricted to using the property for specified time frames. Condotel financing is a rare product, but available. A consumer should be very careful to identify this upfront so that they do not waste time and money on appraisals and application fees only to find out the property is ineligible.
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