A mixed use property mortgage is for a real estate property that is zoned to allow some combination of residential and commercial occupancy and where residential and commercial occupancy currently exists.
There can be residential mixed use mortgages where the majority of the use is defined as residential, and in many cases, this needs to be a very higher percentage.
There are also commercial mixed use mortgage programs where the majority of the space utilization is occupied for commercial purposes.
With respect to answering the question as to what mixed use mortgage programs area available, this is a proverbial loaded gun of a question in that the answer can depend on a number of different things including but not limited to location, mortgage amount, and the commercial/residential split.
In terms of location, there are institutional lenders such as trust companies that will only consider certain types of mixed use properties in certain areas within certain mortgage advance amounts. Even within a single company, there can be significant differences in their lending program from one location or region to another.
In more remote areas, the only institutional lenders that will consider a mixed use mortgage application in certain locales are credit unions, which also tend to price the cost of borrowing higher in these local markets due to the lack of institutional competition and higher risk of loss.
For many banks and institutional lenders, the mixed use property mortgage offerings is something that is shoe horned into either their existing residential mortgage programs or commercial mortgage programs and as such do not tend to be very comprehensive in terms of what can be financed in the mixed use category.
Because of the high potential variability among conventional lenders, private mortgage financing provides a significant amount of capital into mixed use property financing.
For existing properties, it can be quite a work out to try and locate the best available mixed use financing option available. For new builds, its almost imperative to make sure that you are building something that will fit into a mortgage program in your area so that you’re not left without a lower cost institutional mortgage financing solution.
The best way to approach mixed use mortgage financing is to work with an experienced mortgage broker with access to both institutional and private lending sources that finance mixed use properties in your area.