These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
The Quick Read: The 15% down option generally does not apply to a condotel used as an Airbnb, because short-term-rental purchases in Lendmire’s wholesale network top out at 75% loan-to-value, which means at least 25% down. The 15% tier (85% LTV) exists only on select high-leverage programs for standard rentals with stronger credit. So the real choice is between 25% down and a larger down payment, or between a condotel and a different property type.
- On an STR purchase, leverage tops out at 75% LTV, so 25% down is the leanest realistic structure for a condotel.
- A 15% down tier (85% LTV on a purchase) exists on select programs, typically with a 700+ score, but it is aimed at standard rentals, not hotel-style projects.
- STR files usually need a 640+ credit score, about 12 months of hosting history, and coverage of at least 1.00 on a purchase.
- A bigger down payment lowers the loan balance and can lift coverage. It does not remove credit floors, reserve rules, or property eligibility.
Short-Term Rental Calculator
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Rate source: Freddie Mac 30-yr average via FRED® — Federal Reserve Bank of St. Louis · effective Oct 15, 2026
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Short-term rental income is documented with a 12-month history or a market data report. Program parameters update from Lendmire’s centralized guideline source.
As of Oct 15, 2026 · General Freddie Mac market benchmark, not a Lendmire loan offer. Nightly rate, occupancy, taxes, and insurance are editable estimates. Qualifying income for short-term rentals varies by program — some use appraisal market rent, others use documented STR history or projections — and is confirmed in underwriting. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
Side-by-Side
The table below compares the two down payment levels as they apply to a condotel purchase used for short-term rental. The 15% column reflects published industry norms for high-leverage programs, not a condotel tier.
| Factor | 15% down (85% LTV) | 25% down (75% LTV) |
|---|---|---|
| Condotel/STR availability | Generally not available | Top STR purchase tier |
| Where the tier exists | Select programs, standard rentals | STR and condo-type collateral |
| Typical credit expectation | Around 700+ | 640+ minimum for STR |
| Coverage basis | Rent vs. PITIA (HOA included) | Rent vs. PITIA (HOA included) |
| Coverage floor | 1.00 where select programs start | 1.00 on an STR purchase |
| Personal income docs | None; property income drives the file | None; property income drives the file |
| Entity vesting | LLC possible, per program terms | LLC possible, per program terms |
| Reserves | Vary by lender and leverage | Vary; commonly near 6 months of PITIA |
The 15% column is a reference point, not an option for this property. It is useful mainly for showing what the 10-point gap costs and buys.
Why Condotels Sit Outside Standard Financing
A condotel is a condo unit in a building run like a hotel, with a front desk, a rental program, or a hotel brand attached. That operation is what pushes these loans into non-QM and DSCR channels.
Freddie Mac’s Seller/Servicer Guide lists condo hotels and similar transient housing among ineligible projects. Fannie Mae’s Selling Guide has a comparable ineligible-projects section. Those rules never apply to a DSCR loan itself, and they matter here for one reason: a larger down payment cannot change that classification for agency loans. The exclusion attaches to the project, not to the borrower.
DSCR files are reviewed differently. The lender looks at the project’s operations, the unit’s rental income, and the borrower’s credit and equity. That is why the leverage tier for a condotel is set by the property type before the down payment conversation even starts.
Key Terms Defined
Condotel: A condo unit in a building with hotel-style operations, such as a front desk, a rental program, or hotel branding.
LTV (loan-to-value): The loan balance divided by the property’s value; 75% LTV means 25% down. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
DSCR (debt service coverage ratio): rent used for lender review divided by the full monthly obligation of principal, interest, taxes, insurance, and HOA dues.
PITIA: Principal, interest, taxes, insurance, and association dues, the payment side of the coverage ratio.
Warrantable condo: A condo project that meets standard project guidelines; non-warrantable projects fail on issues like litigation, investor concentration, or low association reserves.
How the Coverage Number Works on a Condotel
Coverage is rent used for lender review divided by PITIA. On a condotel, the denominator carries HOA dues, and condotel dues are often heavy because they fund hotel-style amenities and staffing. Ask the association for the current dues before writing an offer. A unit that looks strong on gross bookings can come in thin once dues are in the payment.
The numerator is the harder piece. Short-term income is usually established through a mix of an appraiser’s STR analysis, a management company’s trailing statement, or bank statements showing platform deposits. Lenders typically discount projected STR income before counting it, which is why documented operating history tends to produce a stronger ratio than a projection for the same revenue.
Clearing 1.00 does not mean the unit cash flows. DSCR compares rent to PITIA only. Repairs, vacancy, cleaning, utilities, management fees, and capital reserves all sit outside the calculation. A condotel with seasonal bookings can clear the lender’s test and still run tight in the off months.
Where does the down payment come in? A larger down payment shrinks the loan balance, which shrinks the principal-and-interest portion of PITIA, and that lifts the ratio. It cannot shrink HOA dues, taxes, or insurance, so on a high-dues condotel the lift is smaller than borrowers expect.
When 15% Down Is the Better Fit
The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
15% down is the better fit when the property is a standard rental and the borrower wants to preserve cash. This applies to a house, townhome, or warrantable condo with a long-term lease. It does not apply to a condotel. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
The 85% LTV tier on a purchase is a select-program product. Borrowers typically need a score around 700 or higher, and the lender will look closely at coverage, reserves, and property type. Fewer lenders in the network offer it, and the file has less room for a weak ratio.
For a reader who wants a condotel specifically, the practical version of this option is to use the lower-leverage path on a different property. A non-condotel condo run as a standard rental can sit in a higher-leverage tier. The hotel operation is what moves the condotel into the restricted tier, and HOA dues, not the down payment, often decide whether the coverage works.
It also helps to separate 15% down from other products. A second-home loan from a standard lender can carry a lower down payment, but a condotel generally cannot use that channel at all, for the reasons covered above. Anyone planning a 15% structure should confirm the property type first, because the project’s classification decides the tier before the down payment does.
When 25% Down Is the Better Fit
Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
25% down is the better fit for a condotel purchase. It matches the top STR purchase tier (75% LTV on a purchase), it gives the file the most coverage cushion at standard leverage, and it keeps the borrower within what the network’s lenders will generally review for hotel-style collateral.
It fits borrowers who:
- have 640+ credit and about 12 months of hosting history,
- are buying a unit with high HOA dues, where a lower loan balance helps the ratio,
- want a file with fewer moving parts, since a smaller loan means more room to absorb a conservative rent estimate,
- plan to hold rather than turn quickly, because condotel refinances typically sit below the standard STR refinance ceiling of 70% LTV on short-term-rental collateral.
That last point matters for exit planning. A buyer who puts 25% down and expects to pull equity out later should model the refinance leverage as tighter than the purchase tier. The condo-specific refinance limits are worth confirming before the offer goes in. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
The guide on whether the down payment minimum differs on an Airbnb purchase versus a cash-out explains how STR collateral changes the refinance side.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
Where Files on Condotels Break
Most condotel files stall on four items:
1. Project classification. The lender reviews the building, not just the unit. The association often cannot say whether the project is warrantable, so the lender’s condo questionnaire settles it. An incomplete questionnaire is the most common preventable gap.
2. Rent evidence. A projection with no history gets discounted. Trailing statements or bank statements showing platform deposits make the income side much cleaner.
3. HOA dues. Dues that rise after the rent figure was built can pull the ratio below the program floor.
4. Reserves documentation. Reserves vary by lender, leverage, and loan size. They are commonly around 6 months of PITIA, and larger loans step up. Statements should show the funds seasoned in the account.
Entity documents add one more layer. A purchase through an LLC needs the articles of organization, an operating agreement, and an EIN letter, subject to lender program eligibility. Personal income documents are not part of a DSCR file. Qualification runs on the property’s income covering the payment, subject to lender guidelines.
Coverage below 1.00 is a separate path. Select lenders in the network will review it, with leverage and terms adjusted. It is not the same program with a lower floor, and on a condotel it typically means more cash down.
Which Down Payment Should You Choose?
Choose 25% down if the property is a condotel. It is the leanest structure the network generally supports for this property type, and the extra equity gives the coverage number room.
Choose 15% down only if the property qualifies as a standard rental, your score sits near the top of the range, and your coverage is strong without help. In that case the lower down payment preserves cash, but the file has less margin. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Treat a larger down payment as a coverage tool, not a cure. The strongest files clear both tests: enough equity and enough rental coverage. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income. Tax treatment varies; consult a qualified professional.
The complete DSCR loans guide covers the full program range, and a Lendmire loan officer can compare options for a specific unit.
Frequently Asked Questions
Can I put 15% down on a condotel with a DSCR loan?
Generally no. STR purchases in the network top out at 75% LTV, so 25% down is the typical minimum. The 85% LTV tier exists on select programs for standard rentals and is not aimed at hotel-style projects.
Does a bigger down payment help the DSCR?
Yes, to a point. It reduces the loan balance and the principal-and-interest portion of the payment. HOA dues, taxes, and insurance stay the same, so on high-dues condotels the lift is limited.
What credit score do I need?
STR files typically need 640 or higher. The strongest leverage tiers usually look for 700+, and most programs sit around 660.
Do I need hosting history?
Most STR programs expect about 12 months of hosting history. Documented history usually supports income better than a projection, which lenders tend to discount.
Can I buy through an LLC?
Often yes, subject to program terms. The file needs the entity documents, and the program reviews the borrower’s credit and reserves.
Investors focused on short-term rentals can review DSCR loans for Airbnb and short-term rentals.
For current guidelines and terms, see Lendmire’s DSCR loan programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a DSCR-focused mortgage broker that helps arrange investor financing across 41 markets, including Washington, D.C., through wholesale and investor-lending channels. DSCR eligibility is generally reviewed by the lender around the property’s rental income rather than personal income documentation, subject to lender guidelines — which works for self-employed investors, LLC operators, and portfolios above four financed properties. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Freddie Mac Seller/Servicer Guide, Section 5701.3
2. Fannie Mae Selling Guide, B4-2.1-03 Ineligible Projects
This article is part of Lendmire’s short-term rental loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a DSCR Loan in Massachusetts · How to Qualify for a DSCR Loan in Missouri · How to Buy an Airbnb With a Partner Using a DSCR Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.