How is financing different when buying a mixed-use building with a commercial unit and residential apartments?

Lenders generally assess a mixed-use building differently from a purely residential property, since the commercial component introduces considerations, such as the commercial tenant's business stability and lease terms, that do not come up in an ordinary residential purchase. Depending on the specific building and lender, some or all of the financing may be treated more like a commercial loan than a standard residential mortgage, which can bring different underwriting standards, documentation requirements, and terms.

Because the mix of commercial and residential space, and the proportion each represents within the building, can affect which lenders are even willing to finance the purchase and on what basis, buyers should not assume a mixed-use building will be financed the same way as a purely residential multi-unit property of similar size. Down payment expectations and available loan products can vary more than they do for a residential-only building. Confirm early with a mortgage professional experienced in mixed-use properties which lenders are comfortable with your specific building's mix of uses before you commit to the purchase.