Thinking about buying a condo-hotel near Dr. Phillips and Universal but not sure how the financing works? You are not alone. Condo-hotels look like condos, operate like hotels, and lenders treat them differently. In this guide, you will learn how loans are structured, what lenders expect, and what to check before you write an offer. Let’s dive in.
What a condo-hotel is
A condo-hotel is a deeded condo unit in a building that functions as a hotel when you are not there. You usually plug into a centralized rental program with front desk, housekeeping, and hotel-style amenities. Near Universal and International Drive, many projects offer nightly or weekly rentals, resort pools, restaurants, and shuttles.
These buildings are popular with second-home buyers and investors who want hands-off rental income close to the parks. Because the property operates as lodging, lender rules, fees, and owner-use limits differ from a traditional condo.
How condo-hotel financing works
Financing depends on the project’s status and your use plan. Many condo-hotels are considered non-warrantable by major agencies, which narrows conventional options and pushes you toward portfolio or commercial lending.
- Conventional mortgage: Sometimes possible, but uncommon. If available, expect tighter underwriting and higher equity.
- Portfolio loan: Local banks and credit unions keep these loans on their books and tailor terms to condo-hotels.
- Commercial or investor loan: Used when a project functions fully as hotel lodging. Terms differ and rates are usually higher.
- Jumbo loan: Available for higher-price points, but eligibility still depends on project status.
- FHA/VA: Generally not available for condo-hotels due to program rules and project eligibility.
Down payments and qualifications
- Investor purchases commonly require 25 to 30 percent or more down.
- Commercial loans often start around 30 percent equity.
- Strong credit, solid reserves, and a low debt-to-income ratio improve your options. Portfolio lenders may allow lower scores with larger down payments.
Using rental income to qualify
Lenders often limit or exclude rental pool income. Some may count a portion of documented net income averaged over multiple years. Be ready to provide the rental management agreement and the building’s rental history to support any income used in underwriting.
What lenders scrutinize in the project
- Warrantability and investor concentration.
- Owner delinquency rates, reserves, insurance, and any litigation.
- Presence of a master lease or single-entity ownership concentration.
- Hotel-like operations that can push the file toward commercial treatment.
Rates, terms, and fees
Expect higher rates than a traditional condo loan. Some products use interest-only periods or 20 to 25 year amortizations. Lenders may charge risk-based or portfolio origination fees. Build a cushion for HOA dues, resort fees, management fees, and taxes that affect cash flow.
Owner-use, taxes, and insurance
Owner-use rules vary by project. Many condo-hotels cap owner stays, set blackout dates, and require you to place the unit in the rental pool when not occupying. These rules can limit access to standard owner-occupied mortgage programs.
Short-term lodging is subject to transient rental taxes in Florida, with state and local layers. Management companies often collect and remit, but you should confirm how taxes are handled. Rental income is taxable. Speak with a CPA about deductions, depreciation, and how short-term status may apply.
Insurance is twofold. The association carries a master policy for the building, and you will typically need an HO-6 unit policy to fill gaps. Lenders will check flood zone status and require flood insurance if applicable. In Florida, review windstorm coverage and deductibles in the master policy.
Local rules near Dr. Phillips
Dr. Phillips is in unincorporated Orange County near Restaurant Row and the Universal corridor. Jurisdiction matters because rules differ between unincorporated Orange County and the City of Orlando. Some properties operate under hotel licenses that allow nightly rentals. Others require registration and compliance as transient rentals. Always confirm the exact address jurisdiction before assuming what is allowed.
Due diligence checklist
- Confirm jurisdiction and short-term rental rules for the address.
- Obtain HOA documents, budgets, reserve studies, and insurance certificates.
- Review the rental management agreement and rental pool rules.
- Request historical occupancy, average daily rate, and net owner distributions for 2 or more years.
- Speak with local lenders who finance condo-hotels and get side-by-side scenarios.
- Consult a CPA about transient taxes and income tax treatment.
- Get insurance quotes for HO-6, flood if required, and windstorm exposure.
- Check for pending litigation, special assessments, and reserve levels.
- Verify owner-use calendar limits and blackout periods.
- Ask how fees are charged, how bookings are sourced, and when owner funds are remitted.
Condo-hotel vs. traditional condo
- Financing ease: Traditional warrantable condos are usually easier to finance with lower down payments and better rates. Condo-hotels often need portfolio or commercial loans.
- Income stability: Long-term leases in traditional condos may be steadier. Condo-hotel income varies by season, occupancy, and average daily rate.
- Owner flexibility: Traditional condos often allow longer stays and long-term tenants. Condo-hotels commonly limit owner use and require rental participation.
- Resale: Buyer pools can be smaller for condo-hotels due to financing limits. Traditional condos often appeal to a broader group using conventional loans.
Common pitfalls and red flags
- Non-warrantable projects with high investor concentration or litigation that restrict financing.
- Management contracts with high fees, long exclusivity, or vague remittance rules that reduce returns.
- Weak or missing rental history that limits usable income for qualification.
- Confusion about jurisdiction or permitting that creates compliance risk.
- Underestimating HOA, resort, management, and tax costs that squeeze net income.
Build the right team
Condo-hotel deals are achievable when you align lender expectations, project rules, and your goals. Start with a local lender who closes condo-hotel loans, then add a CPA and an insurance agent who understand Florida short-term rentals. Work with a real estate team that knows the Orlando resort market and can flag project-level issues early.
If you are weighing a condo-hotel near Dr. Phillips versus a traditional condo, we can map out financing scenarios, connect you with experienced lenders, and request the right documents from day one. For hands-on guidance and trusted referrals, connect with Mark Werner.
FAQs
What is a condo-hotel near Universal?
- It is a deeded condo unit in a building that operates as a hotel with centralized reservations, housekeeping, and short-term rental programs.
Why are many projects non-warrantable?
- Investor concentration, hotel-style operations, master leases, and association factors often prevent agency approval, which limits conventional loan options.
Can I use FHA or VA financing?
- These programs are generally not available for condo-hotel properties due to eligibility rules and project approval requirements.
How much down payment is typical?
- Investor buyers often need 25 to 30 percent or more. Commercial loans commonly require 30 percent equity.
Will lenders count rental pool income?
- Some may count a documented portion of multi-year net income, but many limit or exclude short-term gross revenue when qualifying.
What taxes apply to short-term stays?
- Florida imposes transient rental taxes at the state and local levels. Management companies often collect and remit, but you should verify the process.
What insurance will I need?
- Expect an HO-6 unit policy in addition to the association’s master policy. Lenders will require flood coverage in FEMA zones and will review windstorm coverage details.
