My dream house is zoned C-1 (commercial). What can I do?

4 Replies

Hey everyone,

After almost a year of searching, I have found a house that meets my needs (4 garage bays), in an area close to where I work.

The zoning is really throwing a wrench in the purchase. The one seller has passed away and the wife, who is in a nursing home, has signed over Power of Attorney to a woman I'm having trouble locating (no relation to seller, possibly a court order)

My agent says I won't be able to get a conventional loan on the place, given it is zoned C-1 (light commercial). The listing agent says I will be able to, and wants to go ahead with the purchase agreement. What do you think?

I really can't afford a commercial loan given my budget... I have enough to pay 5% down plus all closing costs and inspections... but not enough to pay 10 or 20% down.

All the ordinances from the county website make it seem like I can't even LIVE in the home, given it is C-1... although the sellers lived there for 61 years. So I'm not so sure how strict they are.... still though, this seems like it will have an impact on financing. Any ideas? Plan of action I can take to purchase this primary residence?

Thank you.

Explain to the loan officer that the house is non conforming residential and will be used as residential . Dont say anything about the garages .  put in your contract verbage about getting a residential loan . 

A legal nonconforming building is not a problem. You may need a letter from the city explaining the situation, at most.

Originally posted by @Matt Hegedus :

Hey everyone,

After almost a year of searching, I have found a house that meets my needs (4 garage bays), in an area close to where I work.

The zoning is really throwing a wrench in the purchase. The one seller has passed away and the wife, who is in a nursing home, has signed over Power of Attorney to a woman I'm having trouble locating (no relation to seller, possibly a court order)

My agent says I won't be able to get a conventional loan on the place, given it is zoned C-1 (light commercial). The listing agent says I will be able to, and wants to go ahead with the purchase agreement. What do you think?

I really can't afford a commercial loan given my budget... I have enough to pay 5% down plus all closing costs and inspections... but not enough to pay 10 or 20% down.

All the ordinances from the county website make it seem like I can't even LIVE in the home, given it is C-1... although the sellers lived there for 61 years. So I'm not so sure how strict they are.... still though, this seems like it will have an impact on financing. Any ideas? Plan of action I can take to purchase this primary residence?

Thank you.

The nursing home would know who the Power of Attorney is. They know all that before they let anyone in.

Originally posted by @Matt Hegedus :

Hey everyone,

After almost a year of searching, I have found a house that meets my needs (4 garage bays), in an area close to where I work.

The zoning is really throwing a wrench in the purchase. The one seller has passed away and the wife, who is in a nursing home, has signed over Power of Attorney to a woman I'm having trouble locating (no relation to seller, possibly a court order)

My agent says I won't be able to get a conventional loan on the place, given it is zoned C-1 (light commercial). The listing agent says I will be able to, and wants to go ahead with the purchase agreement. What do you think?

I really can't afford a commercial loan given my budget... I have enough to pay 5% down plus all closing costs and inspections... but not enough to pay 10 or 20% down.

All the ordinances from the county website make it seem like I can't even LIVE in the home, given it is C-1... although the sellers lived there for 61 years. So I'm not so sure how strict they are.... still though, this seems like it will have an impact on financing. Any ideas? Plan of action I can take to purchase this primary residence?

Thank you.

 When one agent thinks you can get a residential loan, and the other agent doesn't, the price of a definitive answer is an appraisal fee and time. I did a mortgage on something zoned to be a "light industrial warehouse" a while back, but probably fewer than half of properties with non-residential zoning can get residential financing. The price of an answer is an appraisal fee.

The listing agent thinks it can go residential? Great, get her to pay for the appraisal to confirm it. :P If not, then prepare to be out the cost of the appraisal fee and your time if the Real Estate Gods are not smiling upon you. 

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