This is what I received just this morning from the bank:

"
This is directly from the regulation “Credit extended to acquire a rental property is deemed
to be for business purposes if it contains more than 2 housing units”.

"
I am trying to buy a 4 plex, with 20% down. Can I not get a 30 term with a fixed interest rate? The lending for rentals currently has me confused. I'd appreciate some valuable input.

This is what terms the commercial loans are, which I don't know is good or not:

10/3 ARM 6.625% - adjusting at Prime + 1.25% (Cap 2%)

7/3 ARM 6.375% - adjusting at Prime + 1.25% (Cap 2%)

5/3 ARM 5.99% - adjusting at Prime + 1.25% (Cap 2%)

3/3 ARM 5.625%- adjusting at Prime + 1.25% (Cap 2%)

1/1 ARM 5.25% - adjusting at Prime + .75% (Cap 1%)

***Floor: 4.25% ***

Find a new bank. You can get a 30 year fixed.

That bank is clearly not experienced in real estate. Find one that is.

Talk to several lenders. Walk in and see them face-to-face rather than deal with email where your question may be misunderstood.

4 and less is residential. The bank is misinformed or they just have different criteria.

Talk to some other banks.