Shopping for a condotel in Canyons Village and wondering how the financing actually works? You’re not alone. These hotel-style residences look like condos, but lenders often treat them differently, which can change your loan options, rates, and timeline. In this guide, you’ll learn how condotel loans work in Park City, what lenders check, typical down payments and reserves, and a clear pre-approval plan so you can move confidently. Let’s dive in.
What is a condotel?
A condotel is a condo you own that also operates like a hotel. Units may participate in a rental pool, use a front desk, and have professional management that markets short-term stays. The hotel-style services and rental activity are what shape your financing path.
In Canyons Village, this setup is common. Many projects include optional or mandatory rental programs, shared services, and brand-level standards. Those features are great for guests and owners, but they can make the project “non-warrantable” for many mainstream loans.
Why Canyons Village is different
Canyons Village sits in a resort hub where short-term rentals and hotel-branded residences are part of the neighborhood fabric. Because hotel operations are more common here, many buildings do not meet standard agency rules that apply to typical condos. That is why buyers often use portfolio or specialty lenders that regularly finance resort properties.
Warrantable vs non-warrantable
“Warrantable” means the condo project meets agency guidelines from Fannie Mae or Freddie Mac. These rules look at things like owner-occupancy, commercial space, HOA reserves and litigation, rental restrictions, and single-entity ownership concentration. Hotel-style programs or mandatory rental pools commonly push a project into the non-warrantable category.
If your building is warrantable, you can often access conventional agency-backed loans with more favorable pricing. If it is non-warrantable, you will likely use a portfolio or specialty condotel lender that holds the loan in-house and sets custom terms.
Loan options for condotels
Agency conventional loans
When a project is warrantable, agency loans usually offer the best rates and terms. In Canyons Village, many hotel-style projects are not warrantable, so this option is less common.
FHA and VA loans
FHA and VA maintain condo approval lists and have strict criteria. Because of short-term rental programs and hotel operations, many condotels are ineligible. When a project is approved, FHA offers low down payment for qualified buyers and VA can offer no down payment for eligible veterans. In resort condotels, these approvals are uncommon.
Portfolio and local banks
Local banks, credit unions, and portfolio lenders are the primary path for non-warrantable condotels. They set custom terms and will review the project documents closely. Expect larger down payments and a rate premium for this flexibility.
Specialty and private lenders
Some nonbank lenders focus on resort and condotel products. Pricing is usually higher and documentation can be more detailed, but they may offer options like interest-only periods.
Hard-money and bridge loans
These are short-term, higher-cost solutions used when speed matters or a refinance is planned later. They are typically a last resort.
What lenders look for
Down payment and rates
- For many non-warrantable condotel purchases, plan for at least 25–30% down as a practical starting point.
- Typical loan-to-value limits for investor-use units often fall in the 60–75% range. Owner-occupants may see slightly higher LTVs, but many lenders still want 20% or more down.
- Expect a rate premium of about 0.5% to 1.5% above comparable warrantable condo or single-family loans, depending on your profile and the lender.
Reserves and HOA health
- Lenders commonly ask for stronger cash reserves. Many want 6–12 months of HOA dues in reserves or escrow, on top of standard mortgage reserves.
- Underwriters review the HOA budget, reserve study, insurance, and whether the association relies on rental revenue to cover expenses.
Documents and scrutiny
- Project-level: HOA budget, reserve study, balance sheet, minutes, CC&Rs and rental rules, insurance, special assessments, ownership concentration, and any litigation.
- Rental-level: rental pool agreement, management contract, fee schedules, historical occupancy and revenue, and any master lease or revenue-sharing terms.
- Borrower-level: tax returns, pay stubs, bank statements for reserves, credit, and rental income history if used to qualify.
Rental programs and STR rules
Why programs matter
Hotel-style rental programs suggest commercial operation. Underwriters may see mandatory rental pools, operator-controlled revenue, or high investor concentration as risk factors and classify the project as non-warrantable. Lenders often discount or exclude speculative rental income when qualifying unless you can provide documented history.
Park City STR context
Park City and Summit County regulate short-term rentals through licensing, zoning, and tax collection. Lenders will want to confirm that your specific unit can legally operate as a short-term rental. You should verify current municipal requirements, the building’s eligibility, and how transient lodging taxes are handled, since taxes and fees affect net income.
Hotel residences vs amenitized condos
- Hotel-branded residences: centralized management, mandatory rental pools in some cases, brand services, and hotel-level operations. These projects are more likely to be non-warrantable, which means higher down payments and a rate premium.
- Amenitized resort condos: owner-controlled HOAs with optional rental management. When they meet agency criteria, you may access conventional loans with more favorable pricing and, in limited cases, FHA or VA if approved.
Pre-approval roadmap
- Early document review. Ask for HOA documents and any rental or management agreements as soon as you get serious about a building, ideally before you write an offer.
- Determine warrantability. Have a mortgage professional evaluate the project for agency eligibility. If non-warrantable, move to portfolio or specialty options.
- Identify lender options. Request quotes from multiple portfolio or specialty lenders that finance Canyons Village condotels.
- Gather underwriting documents. Prepare project, rental, and borrower documentation in a single package to speed underwriting.
- Confirm STR compliance. Verify Park City licensing, HOA rental rules, and tax obligations for your unit type.
- Negotiate contingencies. Include financing and project-approval contingencies tied to lender review of HOA and rental documents.
- Lock terms. Once the lender accepts the project and clears underwriting, review your rate and lock terms.
Lender questions to ask
- Do you finance condotel or hotel-branded residences in Canyons Village, and under what conditions?
- What maximum LTV do you allow for owner-occupied and investor-use condotels?
- What rate premium should I expect compared with warrantable condos?
- What cash and HOA reserve requirements do you require?
- Will you allow documented short-term rental income to qualify, and what percentage will you count?
- Which association and rental documents do you need to approve the project?
- Do you have experience with Park City and Summit County STR rules and permitting?
Buyer checklist
- Review the HOA budget, reserve study, insurance, and meeting minutes.
- Review CC&Rs, rental pool agreements, management contracts, and fee schedules.
- Confirm Park City STR licensing requirements and whether your unit type is eligible.
- Request historical occupancy and revenue data if available.
- Prepare personal financials: tax returns, pay stubs, bank statements, and credit.
- Align expectations: plan for 25–30% down, a 0.5%–1.5% rate premium, and 6–12 months of HOA dues as reserves.
Next steps and local guidance
Every condotel project in Canyons Village is unique, and lender appetite changes with the market. If you want a smooth path to closing, start with project documents, confirm STR eligibility, and line up portfolio or specialty lenders early. If you would like a current lender roster and a tailored pre-approval roadmap for your target buildings, reach out to our team.
Ready to explore Canyons Village options or secure a financing game plan? Let’s talk through your goals and map the right approach with Park City | Deer Valley - Estates.
FAQs
What is condotel financing in Canyons Village?
- It is mortgage financing for condo units that operate with hotel-style services and short-term rentals, often using portfolio or specialty lenders because many projects are non-warrantable.
How much down payment is typical for a Canyons Village condotel?
- Many buyers plan for 25–30% down as a starting point, with common loan-to-value limits between 60–75% depending on occupancy and lender.
Can you use short-term rental income to qualify for a condotel loan?
- Some lenders allow a percentage of documented rental income, but many discount or exclude speculative income and require proof of history and management reports.
Are FHA or VA loans realistic for Canyons Village condotels?
- These programs require condo approval, and many hotel-style projects are ineligible. FHA or VA may be possible only if the specific project meets their approval criteria.
How do Park City short-term rental rules affect financing?
- Lenders want to see that your unit can legally operate as a short-term rental under local rules and that taxes are handled correctly, since this impacts underwriting and projected income.
