1-4 Unit, Mixed-Use Property Mortgage Lenders


Looking for mixed-use property mortgage lenders, when you’re dealing with 1-4 unit buildings is the wrong way to go about it.

The reason?

There are many lenders that offer mixed-use property loans. The problem is that there are not many programs with great interest rates.

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Mixed-Use Property Loans

For all the options but the last one, the property must be the borrower’s primary residence and the commercial aspect must in no way restrict the residential use of the property. And, of course, the commercial space must be secondary. Here are all the 5 options:

1. Conventional Mixed-Use Property Loans

conventional loan mixed use property

If you qualify for a 1-unit property mortgage, you’d qualify for this one too if it met Fannie Mae’s mixed-use property restriction:

The borrower must own and operate the business being run out of the property. Think barber shop in the front, apartment in the back.

2. FHA Loans For Mixed-Use Properties

FHA Loan for a Mixed-Use Property

If you qualify for a a 2-4 unit residential loan, you’ll qualify for an FHA loan on a mixed-use property if you meet FHA’s restriction:

The residential part of the property must make up at least 51% of the total property square footage.

3. USDA Mixed Use Loan Requirements

USDa mixed use loan
USDa Mixed-Use Loan

In a way, the title above is misleading, because the USDA does not allow commercial space. Specifically, it does not allow buildings that are mainly used for income-producing purposes. However, if you have a barn or a silo, or some other such structure that is being used as storage, you’re fine.

You’re also fine if you run a home-based enterprise you’re fine. Child care, selling products or producing crafts and anything else like those that does not require specific commercial real estate features.

You’re also fine with anything that produces a bit of extra income, say gardening.

4. VA Loans for Mixed-Use Properties

VA Loan For A Mixed-Use Property

If you qualify for a 1-4 unit residential VA loan, you’ll be able to purchase a mixed-use property as long as the property is a 1-unit property with no more than 25% of the floor area assigned for the commercial use and one unit is used as the borrower’s primary residence. Think day care in the front, apartment in the back.

It will also guaranty loans on 5 and 6 mixed-use properties, if there are two VA’s applying. One unit can be commercial.

5. Commercial Loans for Mixed-Use Properties

There are many commercial lenders, so there are many lenders for mixed-use 1-4 unit buildings. Here, the big impediments are

  1. the loan size: many do not bother with loans under $500,000, some go as low as $300,000
  2. the down payment is 20-35%
  3. many only lend on properties within a few neighborhoods around their location(s).

Good Mixed-Use Property Mortgage Lenders? – Your Options

So, stop looking for mixed-use property mortgage lenders, most do them. Here’s a summary of your best options, best on property type:

  1. If you’re interested in a 1-unit mixed-use property, Fannie Mae and FHA loans are great options, for non-VA people. The VA is the best for those who qualify for VA loans.
  2. If you’re interested in a 2-4 unit mixed-use property, the FHA is your best option, if you’re going to occupy one of the units as your main residence. Otherwise, you must get a commercial mixed-use property loan.


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