Mortgage Glossary
Condotel (Condominium Hotel)
A condominium operated like a hotel — rental pool, hotel services, on-site management. Investor-friendly financing requires a non-QM lender.
What is a condotel?
A condotel — short for “condominium hotel” — is a building where individual units are owned as condominiums but the building operates much like a hotel. Units are typically pooled into a short-term rental program managed by an on-site management company. Guests check in at a front desk, housekeeping services run between stays, and the building offers hotel-style amenities (pools, restaurants, concierge).
Condotels are common in resort markets — Miami Beach, Orlando, Las Vegas, the Outer Banks, ski-resort towns — where short-term vacation demand creates attractive nightly rates. From a financing perspective, condotels carry an unusual risk profile: revenue depends on tourism, the HOA budget includes substantial hotel-operations expenses, and the rental pool means owners don’t fully control how the unit is used.
These traits put condotels outside Fannie Mae and Freddie Mac warrantability rules, so conventional banks won’t finance them. They require a non-QM lender that specializes in investor product.
How condotels apply at Total Quality Lending
Total Quality Lending finances condotels under two programs:
- DSCR (investor): max 75% LTV on purchase, 65% on refinance, max loan $1.5M
- Prime Time (primary, second home, or investment): max 85% LTV, max loan $2.5M
On DSCR, qualifying income is the property’s rental cash flow (long-term lease, short-term rental data, or AirDNA report). TQL’s in-house condo-doc review team verifies the HOA structure, rental pool terms, and litigation status — the same review banks won’t do. See DSCR loans for the full program details.
FAQs
Can I get a mortgage on a condotel?
Yes — but not from most banks. Conventional Fannie Mae and Freddie Mac loans don't finance condotels because the rental pool and hotel-like services make the property non-warrantable. Total Quality Lending's DSCR program finances condotels at max 75% LTV on purchase and 65% on refinance (max $1.5M loan). Prime Time goes up to 85% LTV with a $2.5M loan cap.
What's the difference between a condotel and a regular condo?
A condotel has hotel-like operations: an on-site management company handles short-term bookings (often through a rental pool), provides front-desk services, housekeeping, and amenities like a typical hotel. A regular condo is owner- or tenant-occupied with no shared hotel infrastructure. Many condotels are in resort markets (Miami, Orlando, Las Vegas, ski areas).
Do I have to use the rental pool?
It depends on the condotel HOA. Some require all owners to participate in the rental program; others make it optional. TQL's underwriting reviews the HOA documents to confirm the program structure and how the unit's income qualifies for DSCR calculations.
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Talk to a loan officer who knows the condotel review process.