Under Contract and Mortgage Terms Just Changed

[Louis Zameryka]

I'm under contract for a condo for STR and I underwrote with a typical mortgage but my lender just came back after my initial approval to tell me that as of Jan this year Fannie and Freddie now consider the development to be a condo hotel. Which makes this a Non QM mortgage and more expensive to close both from an interest rate and fee point of view.

My offer to the seller included a $5000 deposit that was not contingent on financing. So I lose that if I walk.

The original underwriting would have lost me $50 a month for 18months this new version means $11k more in fees and about $150 a month in losses for 18 months.

Any advice for what I should do?

What additional info can I provide to help folks share advice?

Thanks