Is this scenario residential or commercial? (in NY state)

Is this scenario residential or commercial? (in NY state)

Syracuse NY · Member since 2018 · 24 posts · 4 votes

I know you can get a residential loan on up to a 4 unit property assuming it will be your primary residence, and you can even get a residential loan on a property with a commercial rental like a storefront beneath an apartment as long as the residential space is the majority of the sq footage. The thing I don't know for sure, is whether the commercial space counts towards the unit count. I found a property that has 4 residential units and a downstairs storefront. My gut feeling based on what I've found is that this wouldn't be eligible as residential but I wanted to double check, just in case. 

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  • Lender · Orange County, CA · Member since 2019 · 299 posts · 255 votes
    4y

    That will be a commercial loan. 

    Here is the Fannie Mae guideline on mixed use properties:

    Mixed-Use Properties

    Fannie Mae purchases or securitizes mortgages that are secured by properties that have a business use in addition to their residential use, such as a property with space set aside for a day care facility, a beauty or barber shop, or a doctor’s office.

    The following special eligibility criteria must be met:

    • The property must be a one-unit dwelling that the borrower occupies as a principal residence.
    • The borrower must be both the owner and the operator of the business.
    • The property must be primarily residential in nature.
    • The dwelling may not be modified in a manner that has an adverse impact on its marketability as a residential property.
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