You found it. A beachfront unit at Shell Island Resort in Wrightsville Beach or the St. Regis in North Topsail for a price that seems too good to be true. You call your lender, excited to lock in a rate, only to hear a confusing rejection: We can't finance that project. It's a condotel.

In the coastal markets of New Hanover, Pender, and Brunswick counties, the line between condo and hotel is often blurred. For buyers, crossing that line unknowingly can derail a transaction in seconds.

Understanding the difference between a Warrantable Condo and a Non-Warrantable Condotel is the single most important financial lesson for coastal investors.

The "Front Desk" Red Flag

To you, it looks like a condo. It has a kitchen, a bedroom, and a deed. But to Fannie Mae and Freddie Mac (the government-backed entities that buy most mortgages), it looks like a hotel.

A property is often classified as a Non-Warrantable Condotel if it has:

• A Front Desk: If there is a check-in counter in the lobby that looks like a Marriott, it’s a red flag.
• Nightly Rentals: If the building allows for 1-night stays rather than the standard weekly minimums found at places like Duneridge Resort.
• Commercial Revenue: If the HOA budget relies heavily on income from an on-site restaurant, bar, or conference center.

The Usual Suspects

In our specific market, certain buildings are legendary for being cash or portfolio loan only because of this classification.

Wrightsville Beach: Shell Island Resort is the classic example. It functions heavily as a hotel, making traditional 30-year fixed mortgages difficult to secure.

North Topsail Beach: The St. Regis Resort and Villa Capriani. While stunning, these resort-style complexes often face financing hurdles due to their hotel-like amenities and, in some cases, their location in COBRA zones.

Ocean Isle Beach: The Causeway Inn offers affordable entry points but is explicitly structured as a condotel, requiring specific financing or cash.

Strategic Reality: The "Portfolio Loan" Solution

Just because a big bank won't lend on it doesn't mean you can't buy it. It just means you need a Portfolio Loan.

Myth: I can't get a mortgage for a condotel.
Reality: You can, but not from a national call center. You need a local community bank or a specialized lender who keeps the loan on their own books rather than selling it to Wall Street.

The Terms: Be prepared for a 20–30% down payment (sometimes higher) and an interest rate that is typically 0.5% to 1.5% higher than the prevailing residential rate.

The ARM Factor: Many portfolio loans are Adjustable Rate Mortgages (ARMs), fixed for 5 or 7 years, rather than the traditional 30-year fix.

Your Next Step

Buying a condotel can be a lucrative investment—these units often generate massive rental revenue because they operate like hotels. But you cannot enter the contract assuming a standard pre-approval letter will work.

At Aspyre Realty Group, we know which buildings are warrantable and which require a specialized lender. We are experts in listening and communicating people's wants into homes that work for them—and connecting you with the local bankers who can actually get the deal to the closing table.

Contact Aspyre Realty Group today. Let’s identify the right asset for your portfolio and the right financing strategy to secure it.