Mixed-Use Commercial Properties
Financing for Mixed-use Commercial properties can be very limited among the lending community, and loan options are not plentiful compared to 1-4 unit Residential properties. Similar to 5-10 Multi-family properties, these property-types are ineligible for traditional Conventional and FHA/VA loans. We finance DSCR for Mixed-use properties, meeting the needs of more investors and their portfolio goals.
A Mixed-use property is a combination of a Commercial Space with Residential units “all-in-one”. A typical property often features a retail store or professional office on one floor and contains residential units for tenants on another floor of the structure. DSCR cannot be used strictly for purchasing a Commercial-only property, it must have residential units in rent-ready condition. Like other types of Multi-unit properties, a Mixed-use property can also make for a great investment.
- Unlike standard 1-4 unit DSCR, the Mixed-use DSCR program is only for experienced investors. This is defined by a borrower owning at least one investment property for at least 12 months within the prior 36 months.
- DSCR for Mixed-use must be 1.00 or greater. Ratios below 1.00 are not allowed.
- Total rent from the Commercial space cannot exceed 49% of the total rents of the property. For example, if the property has a Commercial Space renting for $2500 a month, the total combined rents from the residential units must be greater than $2600.
- Some types of businesses for the Commercial space are ineligible. This includes but is not limited to hazardous materials on site, any illegal activities, “adult-only” activities, and several others.
