If you're looking to buy a unit at Purgatory Village at Durango Mountain Resort, you've likely already discovered that most mortgage lenders can't help you. The reason: Purgatory Village is classified as a condo-hotel (condotel) — and Fannie Mae, Freddie Mac, FHA, and VA will not lend on condotel projects.
That doesn't mean financing is impossible. It means you need the right lender.
Why Purgatory Village Is a Condotel
Purgatory Village operates with a front desk, mandatory or optional rental pool enrollment, and hotel-style amenities. Under Fannie Mae and Freddie Mac guidelines, this classification makes the project ineligible for conventional financing — regardless of your credit score, income, or down payment.
The same applies to FHA and VA loans. These programs follow agency guidelines that exclude condo-hotel projects.
How to Finance a Purgatory Village Unit
Two viable paths exist:
- DSCR Loan (Debt Service Coverage Ratio): Qualifies on the property's rental income rather than your personal income. No W-2s or tax returns required. Can close in an LLC. Best for buyers who plan to rent the unit through the resort program. Typically requires 25–30% down, 660+ FICO.
- Non-QM Portfolio Loan: A portfolio lender holds the loan in-house rather than selling it to Fannie/Freddie. Some portfolio lenders specifically allow condotel projects. Expect 25–30% down, 660+ FICO, and a rate 0.5–1.0% above conventional.
What to Expect
Down payment: 25–30% minimum Credit score: 660+ (680+ for best rates) Rate premium: 0.5–1.0% above a standard investment property loan Closing timeline: 30–45 days with a lender experienced in condotel financing
Contact Tayton Capital Before You Write an Offer
Condotel financing is highly lender-specific. Before signing a purchase agreement on a Purgatory Village unit, contact us to confirm financing eligibility for the specific unit and confirm the rental program structure won't disqualify it. We have closed Purgatory Village units and know the nuances of this project.