There is a lot of misinformation out there about financing homes that are in a resort-type community. Last issue, I wrote about the process of buying a home in a resort that is associated with a hotel. This article will focus on financing that home. 

Even among professionals in the industry, there is a lot of misinformation about the types of financing available for resort-type units.  Realtors and property managers tend to rely on their experiences with condos, vacation rentals, or fractional ownership. Traditionally, these have been harder to finance. However, a resort residence is not a vacation rental or a fractional ownership. It is a residence that happens to be located in a resort that includes a hotel. In some cases, it is actually located in the hotel. 

There are a lot of variables that should be considered when purchasing a home in a resort community.  First is to remember these are NOT weekly/nightly homes; they are residences that can be put in the reservation program and run by the hotel operator. Most of the time, you can actually live in your resort residence, if you want.  

This brings us to the number one question about financing such a unit.  When the contract is written, does it require your resort residence to be part of the reservation program? According to Brandon Hanson with Cherry Creek Mortgage, there really is no difference in the financing of one of these homes as compared with a traditional home if the reservation program is not required in the contract.

Now, let’s consider the type of product for which you are obtaining financing. Is this a condo, townhome, or single family residence? The main difference between a condo and a townhome is what you own. In a condo, you own the space within your unit. With a townhome, you own the space plus the land below the unit. A single family residence (SFR) refers to a property that has only one main living unit on it. There may be a detached casita or garage, but there is only one structure in which someone resides.

Traditionally, lenders will do a lot more due diligence when they finance a condo. According to Brandon Staples with Sun American Mortgage, this can include making sure the HOA has plenty of reserves and that there is enough insurance in place to protect the home owners and their interests in case of mishap.

There are many programs out there for all types of products. The key is finding a lender that understands the product you are purchasing.  Both Brandon Staples with Sun American Mortgage (480-244-9002) and Brandon Hanson with Cherry Creek Mortgage (435-668-2840) are great lenders that have a lot of experience and expertise with resort products,   and they are both located here in St. George, Utah. If you are considering purchasing a resort product, give either one a call and ask for details about the financing programs available for your unit.