Looking for ways to finance commercially zoned property for Res.

3 Replies

Hi guys, 

Looking for some suggestions on how to potentially finance a commercially zoned property (mixed use) for a primary residence. Realtor told me lenders will not finance the property as a residence, only as a commercial. The seller may be interested in carrying the note, but is older and is leaning towards just wanting out of it. Any suggestions other than going with a straight commercial loan? 

Plan would be to live in this space and potentially build or add on a rental. 

Thanks for the help. 

Here a mixed use  parcel is typically zoned "PD" (planned DEVELOPMENT). he PLAN DOCUMENT WILL Describes the type, size, etc. of the building on the site. This has to be done  as part of the entitlement process.

This is a snap shot from San Jose, CA

  1. Residential      Emergency residential shelter C C C C Section 20.80.500
  2. Live/workS S S  Section 20.80.740
  3. Mixed use residential/commercial C C C Note 6

The "C"s mean conditional, so you would need to get a conditional use permit for residential.

Many planning departments have the ability to do a "dry run" of the approval process to find out what doesn't work in your proposed plan.

Consider that this sounds like a multi-unit building so there maybe a construction loan used, which converts to permanent financing when it's sold.

Would be easier to use creative financing instead of changing the legal use of the Property. If it's not zoned residential you won't get a residential loan.

Ok thanks so much for the info!

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