Mixed-Use Property Commercial Loans
A mixed use property is one that has a combination of residential tenants and commercial tenants.The most common example would be a multi-storied building with apartments upstairs and office or retail space on the lower floor(s). Another example could be a free standing commercial space on the same parcel of land as a single family resident.The tenant mix of the property, loan size, and other property characteristics can have a significant impact on the different loan options available.
The types of tenants and rent paid by them are an important factor considered in underwriting. A property that has the majority of rent paid by the residential tenants can be viewed and underwritten more like an apartment loan.Likewise a property that has the majority of the rent paid by the commercial tenants can be viewed and underwritten more like an office or retail building. A mixed use property can be owner occupied or non owner occupied.The borrower can either have a business in a commercial space or they can live in the building however if they live in the building it can possibly have an impact on the type of loan that can be offered.
Structure:Mixed use property commercial loans are generally written with 5, 7, 10, 25 and 30 year terms with or without balloons.In general for a purchase a borrower will be expected to put down 20% plus closing costs.We do offer mixed use property commercial loans with as little as 10% down dependent upon the borrower occupying sufficient space in the building as a commercial tenant.
Paperwork: For this type of loan expect to provide full documentation on the property to include the income and expense statements or property tax returns and property rent roll.If the loan is a refinance you would be expected to provide any available property third party work such as appraisals, environmental reports, title work, or copies of notes.If the borrower occupies space as a commercial tenant they will be expected to provide business financials.
This type of loan can be taken in the name of the individual or the non person entity such as a corporation however the borrower or individuals that have ownership in the holding company would also be expected to personal guarantee the loan.As such anyone that is personally guaranteeing the loan would also be expected to provide personal tax returns, personal financial statements, and have eligible credit.Fees The fees associated with the transaction will include the costs of reports such as appraisals, title work, environmental reports if necessary, and other typical closing costs.
|Mixed Use Loan Details
$2 million minimum
||80% loan to value
||1.20X debt service coverage ratio
|| 20-25-30 years
|Initial Fixed Period:
||3,5,7,10 years fixed
||Average FICO score of 660 or above. Lower credit scores
will be considered with corresponding rate adjustments
|| Mid-Island Mortgage does not charge Origination Fees
||Available for short terms only