DDSCR Authority

Property-type guide

DSCR Loans for Non-Warrantable Condos & Condotels

DSCR loan for non-warrantable condos and condotels in 2026: 65-70% LTV, 1.20+ DSCR, and the specialist lender pool for Miami, Vegas, and Kissimmee condotels.

Updated 17 min read
Non-Warrantable Condo / Condotel — DSCR-financed investment property

Non-warrantable condos and condotels are where DSCR loan financing gets genuinely difficult — but also where the pricing gap between a matched lender and the wrong lender is the widest. Because only 15-25% of DSCR lenders will quote this property class, investors who don’t shop aggressively often pay 0.50-0.75% more than necessary. And because the property’s cash flow story (Airbnb, seasonal vacation rental, hotel-program distribution) is operationally complex, underwriting mistakes can kill deals that should close cleanly.

This guide covers two related-but-distinct property types: (1) non-warrantable condos — standard condos that fail one or more Fannie/Freddie project standards — and (2) condotels — condos operated as hotels with nightly rentals, front desks, housekeeping, and brand flags. They share a lender pool and most underwriting conventions, but condotels have a few additional layers (rental program documentation, brand flag underwriting, seasonality overlays) covered below.

Key DSCR parameters for non-warrantable condos & condotels

ParameterTypical range (2026)Best tier
Minimum DSCR1.20 – 1.251.35+
Maximum LTV (purchase)65% – 70%70%
Maximum LTV (cash-out)60% – 65%65%
Minimum FICO680 – 720740+
Rate premium vs. SFR+0.75% – +1.50%—
Minimum loan amount$150,000 – $250,000n/a
Maximum loan amount$1.5M – $3Mn/a
Cash reserves required6 – 12 months PITI12+
Appraisal formForm 1073 + condotel addendum—
Appraisal cost$700 – $1,500—
Operating history required6-12 months typical12+

Setting expectations: this is the second-most-expensive property type in our entire DSCR collection (only exceeded by 5-10 unit commercial multifamily). You trade broadly worse pricing and lower leverage for access to a specific, high-yield property class — vacation rental inventory in high-tourist markets where the cash-on-cash returns can be 12-18% if operated well.

Non-warrantable vs. condotel: the distinction

  • Non-warrantable condo: A standard condo unit in a project that fails Fannie/Freddie standards. The unit itself may operate as a long-term rental. Example: a regular apartment-style condo in a project where 65% of units are investor-owned (fails owner-occupancy test).
  • Condotel: A unit in a project explicitly operated as a hotel. Front desk, daily maid, short-term/nightly rental as primary use, often branded (Residences at [Hotel Brand]), rental program mandatory or strongly encouraged. Automatic non-warrantable by definition.

Some projects are “condotel-like” — e.g. a high-rise Miami Beach condo with 80% investor ownership where most owners Airbnb — but without a formal rental program or hotel flag. These often get underwritten as non-warrantable rather than condotel, slightly better pricing.

The non-warrantable & condotel DSCR lender landscape

The pool thins dramatically here. Active players in 2026:

National lenders:

  • Angel Oak — Strong on non-warrantable and condotel; foreign national condotel program available; 65-70% LTV.
  • Griffin Funding — Non-warrantable condo and condotel accepted; condotel rate adds clearly documented in their rate sheets.
  • Visio Lending (CoreGrowth) — Non-warrantable condo at 70% LTV; condotel case-by-case.
  • Kiavi — Selective on non-warrantable; condotel generally declined unless very strong file and specific markets.
  • Lima One Capital — Condotel accepted with guidelines; short-term rental operating history required.
  • Verus / Deephaven / Acra (wholesale) — All three have non-warrantable and condotel programs with varying overlays.
  • LendingHome (Kiavi’s legacy brand) and New Silver — Selective on non-warrantable, typically decline condotel.

Market-specific boutique lenders:

  • Miami / South Florida: Several Miami-based private lenders and regional banks have dedicated condotel programs, often with better pricing than national DSCR lenders.
  • Las Vegas: Local Nevada lenders with Strip-condotel specialty; often willing to go to 70% LTV on strong files.
  • Kissimmee / Orlando (Disney area): Specialty lenders for vacation rental pool condos; 65% LTV standard, strong STR documentation required.
  • Pigeon Forge / Gatlinburg / Gulf Shores: Regional Tennessee and Alabama lenders with small portfolio programs for STR condos in tourism markets.

The action item for any investor: pull 3+ quotes from national DSCR lenders AND at least 1-2 local/regional specialists in the subject market. The local-vs-national spread is often 0.375-0.625% in rate and 5 LTV points.

Qualification details

  • Entity ownership: LLC standard.
  • Personal guarantee: Required.
  • Landlord or STR experience: Preferred on condotel. 1-2 years of operating experience on similar assets is typically a pricing improvement and sometimes a requirement.
  • Operating history on subject: 6-12 months of STR operating data strongly preferred. Brand-new condo with no history can still close at reduced LTV (60-65%).
  • Reserves: 6-12 months PITI; condotel often requires 12+.
  • Hotel program / rental program participation: If the condotel has a mandatory rental program, the program’s net distribution statements become the income documentation. Lender reviews the program management agreement.
  • Foreign national: A meaningful percentage of condotel buyers in Miami, Orlando, and Las Vegas are foreign nationals. Angel Oak, Griffin, and several wholesale lenders have dedicated foreign national programs.

Appraisal and income verification

  • Appraisal form: Form 1073 with condotel/short-term addendum documenting hotel amenities, rental program, brand flag, and project-level operations.
  • Cost: $700 – $1,500; higher end for condotel due to complexity.
  • Turn time: 7 – 18 business days.
  • Comparables: Condotel comparables are required — NOT standard condo comps. An appraisal that uses SFR or warrantable-condo comps in a condotel market will be flagged and likely require re-work.
  • Rental income determination:
    • With 12+ months host history: AirDNA or Airbnb/VRBO host dashboard trailing 12 months; most lenders apply a 15-25% haircut.
    • Hotel-program unit: Rental program net distribution statements, reviewed 12-24 months.
    • New construction / no history: Appraiser provides STR market rent estimate OR long-term rental comp as fallback. Lender often applies larger haircut (25-30%) on pure projected income.
  • Seasonality: High-season and low-season income is averaged; lender doesn’t underwrite to peak season.
  • Regulatory verification: Short-term rental legality in the subject municipality must be documented — this kills many deals in cities that banned or restricted STR (NYC, San Francisco, some California coastal cities, Paris-ordinance markets).

Rate and fee expectations

April 2026 ballparks on a clean non-warrantable condo or condotel (720+ FICO, 1.25 DSCR, 65% LTV, 5-year prepay):

  • Non-warrantable condo 30-year fixed: 7.625% – 8.500%
  • Condotel 30-year fixed: 7.875% – 8.875%
  • 10-year I/O intro: +0.125% – +0.375% over 30-year fixed
  • Lender points: 1.50 – 2.75 points
  • Appraisal: $800 – $1,500
  • Condo questionnaire (even for non-warrantable): $100 – $350
  • Underwriting/processing: $1,500 – $2,500
  • Title/settlement: $1,800 – $4,500
  • Total closing costs (excluding down payment): 4.5% – 7.0% of loan amount

LTV pricing: 70% vs. 65% LTV typically adds 0.25-0.375%; going to 60% typically saves 0.25%.

Common pitfalls on non-warrantable condo & condotel loans

  1. Shopping the wrong lender pool. A full-service SFR-DSCR lender will decline condotel after you’ve burned 2 weeks of underwriting. Ask upfront: “Do you accept condotels in [subject market]?”
  2. No operating history. Brand-new condotel with 0-3 months of operating data forces underwriting to projections — larger haircut, lower LTV. Season the property 6-12 months before refinancing if possible.
  3. Rental restriction violation. Some condotel HOAs require participation in the hotel rental program. Buying an “opt-out” unit can violate declaration and make the deal unfinanceable.
  4. STR-banned market. Some cities (NYC, SF, parts of CA) have banned STR or restricted to owner-occupied hosts only. Financing doesn’t work if the business model is illegal. Verify local STR regulation before contract.
  5. Florida post-Surfside. Older Miami and South Florida condotels face structural review overlays. Some lenders have pulled out entirely.
  6. Failing the AirDNA haircut. Investors often model on gross AirDNA revenue; underwriting uses net (after cleaning, platform fees, management) with a 15-25% haircut on top. Model realistically.
  7. Seasonal markets at 60% occupancy. Beach and ski condotels often have 55-70% annual occupancy (vs. 70-85% in urban STR). Underwriter uses actual occupancy; if occupancy is lower than DSCR math requires, the deal won’t pencil.
  8. Brand-flag changes. A condotel under a Marriott flag that loses its flag mid-process creates a material change in valuation and operations. Lenders may require re-review.
  9. HOA assessment surprises. Condotel HOAs can assess heavily for elevator modernization, brand-required upgrades, or reserve shortfalls. Review recent minutes and reserve study.

Market-specific notes

  • Miami / South Florida: Largest condotel inventory in the US. Post-Surfside SB 4-D compliance mandatory. Florida DSCR has state-level detail.
  • Las Vegas / Nevada: Strip and off-Strip condotels; Vegas lenders competitive; 70% LTV achievable. Nevada DSCR details.
  • Kissimmee / Orlando: Disney-adjacent vacation condo inventory; tight rental program requirements; 65% LTV standard.
  • Gulf Shores / Orange Beach: Alabama seasonal beach condotels; 60-70% annual occupancy typical; be realistic on DSCR math.
  • Pigeon Forge / Gatlinburg: Tennessee mountain STR condos; regional lenders often outprice nationals. Tennessee DSCR for state context.

Strategy notes

Non-warrantable / condotel DSCR is the right tool when:

  • You’re buying vacation rental or STR inventory in established tourism markets.
  • The property has 12+ months of strong operating history with documented income.
  • You have 30-35% down payment capacity and 12+ months reserves.
  • DSCR pencils at 1.25+ at 65% LTV AFTER lender haircut on projected income.
  • You’ve confirmed STR is legal and permitted in the subject municipality.

It’s the wrong tool when:

  • The condo is actually warrantable — use the better-priced warrantable program.
  • Local regulations restrict or ban STR (NYC, SF, certain CA markets, Paris-ordinance-style restrictions).
  • You have no operating history and no STR experience — consider seasoning as LTR for 12 months first, then refinance.
  • The subject is in a declining condotel market with oversupply (some pockets of Las Vegas and Florida) — appraisal and DSCR underwriting will be challenging.

Non-warrantable and condotel deals require a specialist — not every DSCR lender will quote them. Get matched to be paired with lenders who actually fund this property type in your market.

Keep exploring

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Frequently asked questions

Any failure of Fannie/Freddie project standards: owner-occupancy below 50%, single entity owning >20% of units, HOA reserves below 10%, active structural litigation, excessive commercial space (typically >25-35%), new construction not yet fully sold out (pre-sale), condotel characteristics (nightly rentals, hotel-like amenities, front desk, daily maid), or location in a project with significant deferred maintenance. Any ONE of these triggers non-warrantable classification.
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