Buying A Commercial Property With A Residential Mortgage -

If the property contains both residential units (like an apartment) and a commercial space (like a shop on the ground floor), you may be able to use a residential mortgage if it meets specific criteria:

: These loans are generally restricted to properties with 1–4 units . Once a building has 5 or more units, it is almost always classified as commercial. 2. Properties with Up to 4 Units

Even if you intend to use a property for income (like renting out all units), a building with can often be financed with a residential loan (specifically a "buy-to-let" or standard investment mortgage) rather than a commercial one. 3. Using Home Equity for a Commercial Purchase buying a commercial property with a residential mortgage

: Most lenders, including the FHA , require the property to be at least 51% residential by floor area.

However, there are a few specific scenarios where the lines between residential and commercial financing can overlap: 1. Mixed-Use Properties (Residential + Commercial) If the property contains both residential units (like

: You must typically live in one of the residential units as your main home.

In general, you buy a purely commercial property with a standard residential mortgage . Residential mortgages are strictly for properties intended for personal housing, while commercial properties are viewed as higher-risk business assets and require specialized financing. Properties with Up to 4 Units Even if

Commercial Mortgages Explained | FAQs | NatWest Business Banking