Mixed-Use Mortgages

What is a mixed-use Mortgage?

In commercial real estate, mixed-use describes a property with two or more purposes. One of the most classic examples of a mixed-use mortgage is an office building with commercial retail on its ground floor or it can be a commercial bakery that has a retail storefront. 

You can apply for a mixed-use property loans from banks, private lenders and non-bank lenders. You can purchase and refinance mortgages for stabilized mixed-use properties in the urban core at up to 85% LTV.

If you are looking for a mixed-use property financing for properties such as residential units above retail space, you can use Multifamily Lender Search Engine to find them. In case you wish to apply for a construction mortgage loans for commercial and multifamily mixed-use properties, Construction Lender Search Engine is your best option.

Various types of mixed-use mortgage loans

Common uses for these types of loans are to:

  • Purchase a mixed-use property

  • Refinance to get cash to stabilize and reposition the property in the market

  • Rate and term refinance to pay off the prior mortgage

  • PUD financing

  • Rehab and/or remodel the property

  • Construct a mixed-use building

What are some common types of mixed-use loans?

  • Bridge loan at 65% LTV to carry the property to permanent financing

  • Cash-out refinance

  • Nonrecourse loan to LLC that owns the mixed-use building

  • Bank financing up to 85% LTV for purchase or refinance

  • Junior debt for complex borrower and property requirements

  • 6.99% to 8% for 60% LTV or lower

  • 80% leverage for value-add properties

  • No prepayment penalty, nonrecourse loan that closes in 2-3 weeks

  • SBA 7(a) non-bank loan

  • Equity based loan where BK and bad credit is not an impediment

  • Loan amounts from $15K to $50M

  • Construction take-out loan

  • USDA B & I loan in a rural area

 

Frequently asked questions about mixed-use mortgage loans

 

How do I get financing for a mixed-use property?

Individuals, corporations, partnerships and LLCs can apply for mixed-use financing with a bank or credit union. These mixed-use mortgage lenders generally require complete documentation, an appraisal and an exit strategy. 

When there is equity in the property (value unencumbered by a mortgage or other lien obligation) the borrower can choose from a bank, credit union, non-bank lender or hard money lender to refinance the property to get cash for any purpose. 

You can use the Commercial Lender Search Engine to see a list of potential lenders for the project. Click the “Contact” button from a search result or a lender profile to send the lender the particulars of your search and your contact information. You can now expect to hear from one or more lenders about the project’s feasibility.

Are you the owner of a mixed-use property? Then you may benefit from working with a commercial mortgage broker to find the lender that best fits your scenario.

What is a mixed-use hard money loan?

Some borrowers may pursue a hard money loan for their mixed-use property. Non-banks and private lenders offer these loan programs. However, a lender will based the decision to approve the loan on the unencumbered value (equity) in the property. 

This equity assures the lender that if you default on the loan, lender can recoup the investment via sale of the property. Unlike a loan from a bank, hard money lenders do not use your credit profile, e.g. bad credit, bankruptcy or foreclosure history as the primary criteria when it comes to determining your eligibility for the loan. 

The appraised value of the property and the amount of any encumbrances against it drives the lending decision. Hard money lenders can close loans more quickly than those offering conventional loans for mixed-use properties.

LTV can be as high at 75%. However, it typically stay within a range of 50% to 65% for purchase or refinance. On the other hand, mixed-use loan rates range from 8.99% to 12% and the repayment terms are generally short.

Which lenders offer mixed-use commercial loans?

Dozens of banks, private lenders and non-banks will finance mixed-use properties. Use the search engine, above, to see how many of the 130+/- lenders in our database that will consider funding your loan request.