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What is a condotel?
A condotel is a condominium project that operates with hotel-like features or services, such as a front desk, daily housekeeping, nightly rentals or a managed rental program. Because of that hotel-style operation, condotels are generally ineligible for Fannie Mae and Freddie Mac financing, so buyers rely on specialty or non-QM programs.
Each unit is individually owned, but the building often functions like a hotel, and owners may place their unit in the rental program when they aren't using it. Lenders look closely at how the project operates, the rental arrangement and the unit itself.
A condotel is one type of non-warrantable condo, but not every non-warrantable condo is a condotel. Financing availability and terms depend on the property and the program.
