This is the question I get from nearly every mainland buyer during their first serious conversation about Dorado Beach: “Can I get a mortgage?”

The short answer is no — not in the way you are thinking about it. There is no equivalent to your mainland jumbo mortgage for a multi-million-dollar Dorado Beach property. The banking infrastructure on the island simply does not support it.

But the longer answer is far more interesting. Because the absence of traditional mortgage financing has given rise to creative, sophisticated, and in many cases more advantageous deal structures that benefit both buyers and sellers in ways that a conventional mortgage never could. If you are a financially sophisticated individual — and if you are reading this, you almost certainly are — the financing landscape in Dorado Beach will make sense to you immediately once you understand how it works.

The Banking Reality: Three Banks, Zero Jumbo Loans

Puerto Rico has three primary banks: Banco Popular, First Bank, and Oriental Bank. All three are legitimate, well-capitalized financial institutions that serve the island’s residential and commercial banking needs. But none of them finance jumbo loans for multi-million-dollar luxury residential purchases.

This is not a reflection of the market’s strength or the quality of the properties. It is simply a function of the island’s banking infrastructure. Puerto Rico’s banks do not have the same secondary market mechanisms that mainland U.S. lenders rely on to originate and sell jumbo mortgage products. The demand for $5 million to $40 million residential mortgages is concentrated among a very small number of buyers — and the local banking system was not designed to service that demand.

For buyers coming from New York, Miami, or California — where a private banker at Chase or Goldman Sachs can structure a $10 million mortgage with a phone call — this can feel like a shock. But it should not be a dealbreaker. Because the alternatives are not just viable — they are often better.

Option 1: Cash — The Simplest Path and the Most Common

The majority of luxury real estate transactions in Dorado Beach close in cash. This should not surprise anyone who understands the buyer profile. These are entrepreneurs, investors, and business owners with significant liquid wealth who have made the decision to relocate to Puerto Rico specifically to maximize what they keep. They are not stretching to afford a home. They are making a capital allocation decision.

Cash transactions are fast, clean, and eliminate the uncertainty that comes with financing contingencies. In a market where inventory is limited and the right property may not come around again, the ability to close quickly with cash is a significant competitive advantage.

Option 2: Seller Financing — The Creative Structure That Benefits Everyone

For buyers who prefer not to deploy their full capital in a single transaction — and there are very good financial reasons not to — seller financing is a well-established and increasingly common option in the Dorado Beach market. I structure these deals regularly and they are one of the most effective tools in my practice.

Here is how a typical seller-financed transaction looks:

Example: $5 Million Property

• Down payment: 40% to 50% — In this example the buyer puts down $2.5 million at closing (50%)

• Seller-financed balance: $2.5 million — The seller carries the remaining balance

• Interest rate: 7.65% — at the time of this writing (rates fluctuate with market conditions)

• Term: 3 to 5 years

• Payment structure: Interest only — monthly payments consist of interest only during the term

• Balloon payment: Full remaining balance due at end of term

On a $2.5 million financed balance at 7.65%, the monthly interest-only payment is approximately $15,937. At the end of the three-to-five-year term, the buyer pays the remaining $2.5 million balance in full — either from accumulated capital, a liquidity event, or by refinancing through another source at that time.

Why Seller Financing Works So Well for Both Sides

This structure is not a workaround for a broken system. It is a genuinely superior solution for financially sophisticated parties on both sides of the transaction.

For the Buyer:

• Preserves working capital. Instead of deploying $5 million in cash, the buyer keeps $2.5 million liquid and available for investments, business operations, or other opportunities. For an entrepreneur or investor whose capital is actively working for them, that liquidity has real value.

• Saves the 1% luxury tax. When we structure the transaction through an LLC, the buyer can avoid the 1% luxury tax that applies to residential real estate purchases in Puerto Rico. On a $5 million property, that is a $50,000 savings. On a $20 million property, that is $200,000.

• Privacy and anonymity. When the property is held in an LLC rather than a personal homestead deed, the transaction remains largely anonymous and invisible. Unlike a homestead deed — which gets recorded at the Puerto Rico registry by a notary and becomes public record — an LLC-held property does not publicly disclose the individual owner. For high-net-worth individuals who value privacy, this is a significant benefit.

For the Seller:

• Attractive return on the financed balance. At 7.65%, the seller is earning a healthy return on the carried amount — often better than what they would earn deploying that same capital elsewhere in today’s market.

• Tax advantages on structured payments. When we structure the financing through an LLC, the seller can realize meaningful tax benefits on the monthly payments they receive. The specific advantages depend on the seller’s individual tax situation and should be discussed with their Act 60 attorney or CPA.

• Enables transactions that might not otherwise happen. Some of the best deals I have put together would not have closed without seller financing. It opens the door for qualified buyers who have substantial wealth but prefer not to liquidate positions or deploy the full purchase price in cash.

Option 3: Emerging Digital Banking Solutions for Act 60 Buyers

There is good news on the horizon for Act 60 buyers who want a financing option beyond cash and seller financing. A new generation of digital banking institutions is entering the Puerto Rico market with products designed specifically for the Act 60 community.

I have a direct relationship with the leadership of a digital bank operating on the island with approximately $450 million in assets. They are actively looking to deploy capital into the Act 60 luxury real estate market and are structuring loan products that function similarly to seller financing — 40% to 50% down with interest-only terms — but originated through a regulated financial institution.

It is important to understand what this is and what it is not. This is not a traditional residential mortgage. It is structured as a commercial business line of credit secured by the property. The distinction matters because it means the underwriting criteria, the documentation requirements, and the terms are all different from what you would encounter with a mainland residential lender.

What it means for buyers is this: for the first time, there is an institutional lending option available for Act 60 luxury real estate purchases that does not require a willing seller to provide financing. This opens up the market significantly — particularly for cash sellers who want the full purchase price at closing and cannot or will not carry a note.

How Sophisticated Buyers Should Think About Financing in Dorado Beach

The absence of traditional mortgage financing in Dorado Beach is not a limitation. It is a feature of a market that operates at the highest level of financial sophistication. The buyers here are people who structure deals for a living — they manage hedge funds, build companies, allocate capital across asset classes. A conventional 30-year mortgage would actually be a less optimal tool for most of them.

Here is the framework I recommend to every buyer:

• If your capital is sitting idle and you have no immediate use for it, buy in cash. It is the fastest, cleanest, and most competitive way to close.

• If your capital is actively working for you — generating returns in your business, your portfolio, or your investments — explore seller financing. Keep your working capital deployed where it earns the most and finance the property at a rate that is likely lower than your return on capital.

• If the seller will not carry financing and you prefer not to deploy full cash, talk to me about the digital banking options. These are new, evolving, and I have direct relationships with the institutions making these products available to Act 60 buyers.

The bottom line: the right financing structure is not about finding a bank to give you a mortgage. It is about finding the structure that optimizes your capital deployment, your tax position, and your privacy — all at the same time. That is what I help my clients do every day.

Ready to Talk Financing for Your Dorado Beach Purchase?

Every buyer’s financial situation is different and the optimal financing structure depends on your specific capital position, your tax situation, and the property you are targeting. I can walk you through every option available — including seller financing structures I have put together on recent transactions and the emerging digital banking products that are just coming to market.

→  Download my free Act 60 Tax Advantage ebook — The complete relocation guide for high-net-worth individuals

→  Schedule a private financing consultation — Let’s discuss which structure makes the most sense for your specific situation

About Christian Kleiner

Christian Kleiner is the Founder & CEO of Christian Kleiner Luxury Real Estate, Puerto Rico’s premier luxury real estate brokerage specializing in Act 60 relocation and Dorado Beach luxury properties. With over 32 years of real estate experience and established relationships across Puerto Rico’s banking, legal, and financial services community, Christian helps buyers navigate the full spectrum of transaction structures available in this unique market. He has been featured in Mansion Global, The New York Post, and Yahoo Finance as a leading authority on Puerto Rico’s luxury real estate market and Act 60 tax incentives.