This study focuses on the application of desiccant coated heat exchangers (DCHEs) in conditions where condensation occurs below the dew point temperature. Previous experimental studies on DCHEs and DCHPs have predominantly examined the sorption mechanism above the dew point, leaving a gap regarding material selection and system design in the presence of condensation. To address this, a guide is introduced that combines the understanding of condensation and sorption processes for desiccant applications. The guide is applied to evaluate the suitability of a superabsorbent-LiCl (SAP-LiCl) composite desiccant for desiccant coated heat pump (DCHP) applications. The stability of the desiccant in the presence of condensed water droplets is validated. Additionally, an experimental investigation explores the relationship between sorption and condensation mechanisms, identifying the transitional coolant temperature at which dehumidification shifts from condensation-dominant to sorption-dominant. By incrementally adjusting the coolant temperature in 5 °C steps, the transitional temperature of the SAP-LiCl based DCHE is determined to be approximately 15 °C under the target operation scenario, rendering its suitability for additional below-dew-point applications. The study reveals optimal operational parameters for DCHE, demonstrating a potential energy saving of 20 %. Based on these findings, a DCHP prototype is constructed to assess the feasibility of DCHE in real-world applications. The transient behaviors of this prototype are analyzed during each operating cycle, yielding a coefficient of performance of 4.97 and a cooling capacity of 1.5 kW under baseline operating conditions.