Sandy's Blog

Condo sales in coastal areas like Myrtle Beach have been hit hard not just by the economy but what has become a term we hear too often "condotel".  Lenders basically stopped making mortgage loans for any condo they considered a "condotel" and each lender had their own definition.  During the past year we had seen a few lenders return to offer mortgages to qualified buyers of what was considered a "condotel" so we say thank you to those lenders.

In the beginning of the "condotel" saga primarily high-rise condo buildings that had a Front Desk check-in and allowed rentals for a week or less were branded. The criteria expanded in so many directions that I won't take up your time trying to list what some lenders used to turn down a loan.

There have been some lenders who will make a loan on a particular condo building today but not tomorrow which has been a challenge for those of us who have people who want to buy a condo.  Recently a national lender didn't care that there was no front desk, no daily cleaning service, no on site restaurants, or any of the other criteria many had listed.  Also the fact the entire complex was primarily occupied by residents and second-home owners did not seem to make a difference because someone in the lender's underwriting department Googled the name of the complex.  Evidently at least one major lender thinks that if the By-Laws of a condo building or complex do not restrict short-term rentals and if even one person uses the internet to rent their unit themselves or has a rental company with a website handle their rental offering their condo for rent on a short-term basis the entire complex is a "condotel" because it showed up when Googled.