Which banks offer FHA on MIXED USE properties?

[Darrick Lowe]

I've been having some difficulty finding a bank that would offer an FHA option for a mixed use property (2 residential, 1 store/office). Has anyone had success getting one? In addition, if i were to find a bank that offers this package, what kinds of hurdles should i expect to encounter before loan is approved (e.g. appraisal, state/local ordinances, etc)?

[Ray Harrell]

It's called the Federal HOUSING Authority, not Federal INVESTMENT Authority. No bank will give you an FHA loan on a property that is zoned mixed-use. It's not even up to the bank, it's the FHA guidelines.

[David Wright]

Your options are to find an alternative Commercial Lender who specializes in these types of transactions.  Most Commercial lenders can do this.  The terms you can expect will vary based on your experience, reserves, and credit scores and of course the property details.   Just to be safe expect 30% down + closing cost and reserves.  This is just an average of what to expect, not written in stone.

I hope this helps!

[Ed Groussman]

FHA loans for mixed use properties are absolutely available for primary residences. The residential square footage must be at least 51%. Message me directly if you have any specific questions or if you are looking to get preapproved.

[Upen Patel]

@Darrick Lowe FHA does allow for the purchase of an owner occupied mixed used property. There are very specific requirements. You need to find a lender that doesn't have any internal overlays.

[Jason S.]

@Upen Patel, what do you mean by internal overlays?  

The potential lender can't have any existing loans, liens, etc with a current commercial tenant of the prospective property?

[Upen Patel]

Originally posted by @Jason S.:

@Upen Patel, what do you mean by internal overlays?  

The potential lender can't have any existing loans, liens, etc with a current commercial tenant of the prospective property?

Agencies (Fannie, Freddie, FHA, VA, USDA) outline guidelines that lenders need to follow if they want to be able to sell the loans back to the agency. Most lenders will be more restrictive then what the guidelines allow for. This is know as an internal overlay.

So, in the case of this post, not all lenders will do a mixed use property even through FHA allows for it.