Condotels do not conform with conventional Fannie Mae/Freddie Mac loan guidelines. That‘s why it’s impossible to get a conventional mortgage loan for your condotel purchase.

Instead, only a small number of select portfolio lenders will finance condotels.

Which lender you use is entirely up to you. However, you would want to work with a lender that successfully funds the loan within a reasonable time at the most favorable rates and terms currently available for the condotel you are buying.

Mortgage lenders and loan programs come and go. Some lenders overpromise and underdeliver. Options that were available last week might be gone tomorrow.

We want to help you avoid the pitfalls. Below is a list of Hawaii condotel portfolio lenders we recently worked with that met or exceeded our expectations. These lenders offer regular conventional financing too, but they are listed here in their respective niche category because that’s where they excelled where others fell short.

The list is not complete and is subject to change. We have no affiliation with any of these lenders. We are just happy to share what worked for our clients. May you benefit from it.

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Two Types Of Condotels

1. Condotels ‘with’ a full kitchen
2. Condotels ‘without’ a full kitchen.  

Lenders listed under category 1) will only finance condotels with a full kitchen.

Lenders listed under category 2) will finance all condotels, regardless if there is a full kitchen or not.

1) Condotels With A Full Kitchen   

The following lenders will finance condotels with a full kitchen, typically requiring a minimum of 30% cash. The interest rate for these loans might be marginally higher, perhaps ~3/8^th to 1/2 percent above the rate of a conventional loan.

The lenders’ definitions of a full kitchen can vary and might look like this:
“Minimum built-in 2-burner cooktop, microwave mounted above, full-size sink, full-size fridge (>7 cubic feet)”

Condotels that meet this full kitchen definition include the Ritz-Carlton, Ilikai, Ilikai Marina, Waikiki Banyan, Waikiki Sunset, Pacific Monarch 1-bedrooms, Marine Surf, etc.

Lenders Requiring 30% Minimum Cash:

(Except, only 20% minimum cash is required if you qualify as an owner-occupant in a building that is zoned ‘apartment precinct’, e.g. Waikiki Banyan, Waikiki Sunset, Hawaiian Monarch 1-bedrooms, etc.)

• Bank Of Hawaii

Jennifer Gershman – 808.291.7270; Jennifer.Gershman@boh.com;  

Brenda Mitchell – 808.286.2656; Brenda.Mitchell@boh.com

• First Hawaiian Bank

Yuko Omorai – 808.227.7294; yomorai@fhb.com

• Territorial Savings Bank

Teri Lynn Oshita – 808.223.0818; TeriLynn.Oshita@TerritorialSavings.net

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2) Condotels Without A Full Kitchen  

Condotels without a full kitchen look and function like a small hotel room with a mini-fridge and a microwave at best. These units include Ala Moana studios, Trump Tower studios, Hawaiian Monarch studios, Aloha Surf studios, Palms Waikiki studios, Pacific Monarch studios, etc.

During the aftermath of the 2008-2009 financial crisis, the loan default rate on condotels without a full kitchen increased and lenders even stopped lending entirely.

See related article:  The Risks Of Short-Term Vacation Renting

Today, only a small number of lenders are financing condotels without a full kitchen. The interest rates are much above prevailing conventional rates and the lender typically requires at least 50% minimum cash. Except, in 2021, for the first time in a dozen years, lenders started offering rare condotel financing options with as little as 30% minimum cash required.

During 2023, lenders have further increased their appetite for condotel financing. If the condotel unit has a minimum of 500 sq ft interior and at least a two-burner hotplate and a fridge, you may be able to get condotel financing with as little as 25% (!) cash downpayment, even without credit or a work visa (!), although at much higher rates. 🙁

These specialty programs can change or disappear again. Our list of lenders is a starting point to help you. The list is neither complete nor guaranteed to be up to date. Check with each lender for their current terms and requirements. — For the most part, be prepared to have at least 30% minimum cash.

Lenders Requiring 30% Minimum Cash:

• Pineapple Mortgage

Jeremiah Blake – 808.321.4663; jeremiah@mypineapplemortgage.com

• Myers Capital Hawaii 

Reed Myers – 808.566.6611;  reed@myerscapital.com

• Greenkey Financial

Kendall Naya – 808.754.9542; Kendall@Greenkeymtg.com

• Infinite Financial

Duncan Hsia – 808.489.1067; duncan@infinitefinancialllc.com

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Lenders Requiring 50% Minimum Cash:

• American Savings Bank

Pom Luxton – 808.352.6662;  pluxton@asbhawaii.com  

Paul Hirano – 808.284.5347;  phirano@asbhawaii.com

Carolyn Johiro – 808.348.4913;  cjohiro@asbhawaii.com   

Alex Truong – 808.428.6248;  atruong@asbhawaii.com

Kiyomi “Kiki” Kise – 808.425.2310; kkise@asbhawaii.com

• Finance Factor

Bill Grant – 808.382.9519; BillG@financefactors.com

• Hawaiian Financial Federal Credit Union

John Miyao – 808.347.3105; john@hificu.com

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Additional Financing Options For Foreign Nationals

Some of our Japanese and Canadian buyers have successfully obtained special financing that is available exclusively to them in their respective home countries.

• Financing for Japanese nationals: Japanese Bank Lending for Overseas Purchases
• Financing for Canadian nationals through Royal Bank of Canada RBC US lending:
  https://www.rbcbank.com/cross-border/us-mortgages.html

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Share Your Aloha And Contribute

• Have you had a positive experience recently with a condotel portfolio lender not mentioned here? – Perhaps we missed your favorite lender. We love to hear your suggestions on who should be added to the list. We are grateful for your sharing to benefit others. With your kind consideration, the list will stay current and help more buyers. We are committed to your success. 
• Are you a portfolio lender that specializes in condotel financing? – Let us know. For the benefit of many, we are happy to add you to the list.

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— We don’t just write about this stuff. We are expert realtors specializing in representing buyers and sellers of real estate in any market condition. We are committed to providing the most excellent service available on the planet. We love what we do and look forward to assisting you too!

Contact us when you are serious and ready. We are here to help.  

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Also…, we want to make this The Best real estate website you visit. We love to get your feedback on how we might improve. We are humbled by your support and remain committed to constant learning and growing with you.  ~ Mahalo & Aloha