DSCR Loan for Condotels: How to Finance Hotel-Condos as Rentals in 2026

Q: What is a condotel?

A condotel is a condominium unit inside a building that is operated like a hotel — front desk, housekeeping, on-site rental management. Owners hold individual deeds and use a rental program for short-term guests. Examples: many Las Vegas Strip towers, Disney-area Florida resorts, ski-resort properties.

Q: Why won't conventional loans finance condotels?

Fannie Mae and Freddie Mac classify condotels as 'non-warrantable' because the building operates as a hotel, not a typical residential condo. They consider the property a commercial asset and do not buy these loans on the secondary market, so conventional lenders refuse to fund them.

Q: What's the maximum LTV on a DSCR condotel loan?

70% LTV (30% down) is standard. Some programs cap at 65% (35% down) for properties in resort markets or buildings with heavy short-term rental concentration. Cash-out condotel refis typically max at 65% LTV.

Q: How do lenders calculate DSCR on a condotel?

Two methods: (1) Form 1007 long-term rent comp if any units rent monthly — most common; (2) AirDNA short-term rental income with a 50–70% haircut for vacancy and operating expenses. Some lenders accept the building's rental program statements showing 12 months of actual income.

Q: What HOA documentation does a condotel DSCR loan need?

Lenders require the condo questionnaire confirming no single owner has more than 25% of units, master insurance is in place, and the building isn't in active litigation. They also verify reserve adequacy and what percentage of units are owner-occupied vs in the rental program.

Condotels — condominium units inside hotel-operated buildings — are the most underserved corner of investment-property financing. Conventional lenders won't touch them. Most non-QM lenders won't touch them. But DSCR loans for condotels exist, and they're the right tool for investors targeting Vegas Strip towers, Disney-area resorts, ski markets, and beach high-rises.

This guide covers exactly how condotel DSCR financing works in 2026: program parameters, the HOA gauntlet you'll have to clear, how lenders compute rental income, and the markets where these loans actually close.

What Counts as a Condotel

A unit is classified condotel when the building operates with hotel-style services. Common indicators:

Front desk and check-in
Daily housekeeping available
On-site rental program operated by the developer or a hotel brand
The unit is enrolled (or eligible) for short-term rental through that program
Often: branded hotel name on the building (Hilton, Marriott, MGM Signature, etc.)

If your unit is in a building with these features, almost any conventional lender will refuse the loan because Fannie Mae and Freddie Mac classify condotels as ineligible (non-warrantable). DSCR is the path forward.

2026 Condotel DSCR Program Snapshot

Program HighlightsMaximum LTV (purchase): 70% (30% down)
Maximum LTV (cash-out): 65% (35% down)
Minimum FICO: 680 (some lenders 660 at 65% LTV)
Minimum DSCR: 1.0 standard; 1.10–1.20 in some markets
Reserves: 12 months PITIA (vs 6 on conventional condo DSCR)
Loan amounts: $150K–$2M (sweet spot $250K–$1M)
Minimum unit size: 500 sq ft typical, 400 sq ft on some programs
Borrower types: U.S. citizen, perm res, ITIN, foreign national (FN at 65% LTV)
Pricing premium vs warrantable condo: +0.50–1.00%

The Condo Questionnaire Gauntlet

Every condotel DSCR loan turns on the condo questionnaire (and sometimes a short-form HOA cert). This is the underwriter's deepest dive in the file. The HOA's answers determine whether the loan can close at all.

Lenders Want Yes/No Answers On:

Owner concentration. Is any single entity / individual owner holding more than 25% of units? — Common at branded resorts; can kill some lenders.
Litigation. Is the HOA involved in active litigation? — Anything beyond routine collection actions is generally a hard stop.
Master insurance. H06 walls-in policy + master HO-6 building policy in place?
Reserve adequacy. Does the HOA have at least 10% of annual budget in reserves?
Commercial space. What % of building square footage is commercial? — Above 35% is often disqualifying.
Short-term rental program. Is the building's rental program mandatory or voluntary? Mandatory programs are easier to underwrite; voluntary requires unit-level rent verification.
Project completion. Building must be 100% complete; phased developments must have current phase fully delivered.

How Lenders Calculate DSCR on a Condotel

Three methods, in order of lender preference:

Long-term rent comparable (Form 1007). If any units in the building rent on monthly leases, the appraiser pulls comps and the standard DSCR math applies. Best outcome — same as a regular condo DSCR loan.
AirDNA / short-term rental projection. Appraiser uses AirDNA market rent plus a 50–70% haircut for vacancy + cleaning + management. Common in Disney-area Orlando, Las Vegas, Hawaii, and beach markets where there is no long-term rent comp.
Building rental program income statements. If the unit is in a mandatory or established program, lender accepts 12 months of actuals from the operator's statements. Best for stabilized resort properties where the operator publishes net distributions.

Markets Where Condotel DSCR Closes Most

Market	Typical Buildings	Notes
Las Vegas, NV	MGM Signature, Vdara, Trump, Palms Place	Deep DSCR market; AirDNA-based comps standard
Orlando / Kissimmee, FL	Disney-area resort condos	Watch HOA STR rules; AirDNA comps
Miami / Miami Beach, FL	Branded oceanfront towers	Higher-balance loans; reserve scrutiny
Honolulu / Waikiki, HI	Tower units in resort buildings	Long-term rent comps often available
Park City / Vail / Aspen ski resorts	Slopeside resort condotels	Seasonal income; underwriting takes 12-mo avg
Myrtle Beach / Gulf Shores	Beach high-rise resorts	Lower price points, easier LTV

Pricing Reality — 2026

Approximate condotel DSCR rates on 720 FICO, 70% LTV, $400K loan in mid-2026:

Standard warrantable condo DSCR (for context): 6.75–7.25%
Non-warrantable condo DSCR: 7.00–7.50%
Condotel DSCR (long-term rent comp): 7.25–8.00%
Condotel DSCR (AirDNA-based): 7.50–8.25%

The Three Reasons Condotel Files Don't Close

HOA fails the questionnaire. Single-owner concentration above 25%, active litigation, or reserves below 10% are the most common kills.
Property is too small. Studio units below 400 sq ft are difficult to finance regardless of value.
Building is too commercial. Mixed-use towers where the residential tower is < 65% of the total building footprint.

Pre-screen the HOA before you go under contract. The condo questionnaire takes 10–14 days and costs $100–$300 to pull; ordering it during due diligence is dramatically cheaper than discovering a hard stop two weeks before closing.

Targeting a Condotel Purchase?

30-second eligibility check. We close condotel files weekly.

Check My Eligibility →

Frequently Asked Questions

What is a condotel? +

A condotel is a condominium unit inside a building that is operated like a hotel — front desk, housekeeping, on-site rental management. Owners hold individual deeds and use a rental program for short-term guests. Examples: many Las Vegas Strip towers, Disney-area Florida resorts, ski-resort properties.

Why won't conventional loans finance condotels? +

Fannie Mae and Freddie Mac classify condotels as 'non-warrantable' because the building operates as a hotel, not a typical residential condo. They consider the property a commercial asset and do not buy these loans on the secondary market, so conventional lenders refuse to fund them.

What's the maximum LTV on a DSCR condotel loan? +

70% LTV (30% down) is standard. Some programs cap at 65% (35% down) for properties in resort markets or buildings with heavy short-term rental concentration. Cash-out condotel refis typically max at 65% LTV.

How do lenders calculate DSCR on a condotel? +

Two methods: (1) Form 1007 long-term rent comp if any units rent monthly — most common; (2) AirDNA short-term rental income with a 50–70% haircut for vacancy and operating expenses. Some lenders accept the building's rental program statements showing 12 months of actual income.

What HOA documentation does a condotel DSCR loan need? +

Lenders require the condo questionnaire confirming no single owner has more than 25% of units, master insurance is in place, and the building isn't in active litigation. They also verify reserve adequacy and what percentage of units are owner-occupied vs in the rental program.

Ready to Get Started?

Quote in 30 seconds. Close in 21–30 days.

Apply in 30 Seconds →

Related Resources

DSCR Capital Partners is a brand of UTM Financial, LLC (NMLS #2591548), a licensed mortgage broker. Informational only; not a loan commitment. Equal Housing Lender.