Rookie question: Traditional lenders say they'll only make a commercial loan for a SFR property because it isn't my primary residence. They'll do 20 year amortization with a 3 to 5 year payoff or at least a rate reset. I read BP posts about getting residential mortages and wonder how. Am I talking to the wrong lenders or saying the wrong words or ??? Thanks for the Real Estate Investing 101 lesson.
conventional loans are for 1-4 family properties or mixed use properties (store downstairs, apartment upstairs).
commercial loans are usually for 5+ unit residential properties or retail/business spaces. Some mixed use properties might fall under this depending on the how the lender views the property.
If you are buying a SFH as a second home or to rent it out, it would still be a conventional loan, but the lender will likely require a higher down payment and interest rate to make sure you have skin in the game and aren't going to run away.
If you are trying to put the property in an LLC, it would have to be a commercial loan because Fannie Mae doesn't lend to corporations.
Got it. Thanks. I must just be talking to the wrong lenders.
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