I am looking at a 4 + 1 unit in the basement property in Steger, IL. Trying to get lender to approve this as a 4 unit to take advantage of the conventional residential loan, however the lender counts the basement as a unit and that makes this a 5 unit commercial loan scenario. The current owner was able to get a residential loan on this property previously. The village considers this a non-conforming legal multi-unit without mention of number of units.
Is there anyway I can satisfy the lender to approve this as a 4 unit with basement for a residential conventional loan?
Tear it out......
Most likely, the lender will not consider that basement as a 5th unit even if it is used as one. It will come down to exactly what the property is legally zones as. If zoned single family, they won't count more than 4 units.
Thanks Alex. The lenders I worked with got hung up on the listing which stated 5 units instead of focusing on the actual zoning being residential. After almost giving up on getting this deal financed, I gave commercial lending a shot and actually got approved with fair terms, albeit slightly higher costs of appraisal and loan. I am hoping to close soon!!
@Navin Francis that's awesome, I'm glad you found a solution! I love brokering commercial loans because so many of them are willing to be flexible with the nuances associated with certain properties.