Board Topic: Commercial vs Residential Loan
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Commercial vs Residential Loan

Posted by: htodman Oct 25 2004, 04:52 PM
I live in New York City and I am interested in purchasing a brownstone. The brownstone currently has 4 units; 2 occupied and 2 unoccupied. I intend to rent the vacant units.

The asking price is 1 million (this is New york City!) and the building needs about $50K in work. The realtor suggests that I apply for a residential loan since the rates are lower. Does this sound kosher?

Posted by: loanuniverse Oct 25 2004, 05:46 PM

As kosher as a Chanukah candy. I am not in residential lending, but it is a well known fact that the largest property that can be financed through a conventional residential mortgage is a 4-unit owner occupied improvement.

However, you may find some trouble getting enough money with just one loan. As you can see by following this link The limit might not be enough to finance the property. Talk to a residential lender {or two} first and see what they can come up with. I am a big fan of keeping the borrowing on the residential side whenever possible. This country does encourage homeownership so you might as well take advantage of that.

Posted by: Commercial Lender Oct 27 2004, 09:20 PM
Yep! Commercial would be 5+ units. We are on Long Island. Give me a buzz if you have any questions about commercial.

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