If you’re looking to buy or refinance a small mixed-use property, you’re in the right place.
One of our programs finances 1- to 4-unit mixed-use residential properties that meet FHA guidelines, providing buyers and property owners with more financing opportunities in today’s mixed-use lending market.
Mixed-use properties can be a smart investment for homeowners and investors alike, but many lenders are hesitant to lend on them due to their complexity. We don’t. In fact, we make it simple, as long as the FHA rules arefollowed.
What We Finance:
We offer FHA financing for small mixed-use properties up to 4 units as long as:
- The borrower occupies the property as their primary residence
- The property has no more than four total units
- The residential space makes up at least 51% of the Gross Living Area (GLA)
That means you can live in one unit, rent out the others, and still qualify under FHA, as long as the residential portion is the dominant use of the space.
Key FHA Requirements You Need to Know
If the property has 3 or 4 units, FHA has a few extra rules to ensure the financing makes sense:
1. 3 Months of PITI Reserves Required
For 3-4 unit properties, you’ll need to show 3 months’ worth of Principal, Interest, Taxes, and Insurance (PITI) reserves. This helps protect both borrower and lender against unexpected costs.
2. The Property Must Debt Service
The rental income from the property must be sufficient to cover the monthly mortgage payment. In other words, the numbers need to make sense on paper, and the property must be financially self-sustaining.
3. Residential Space Must Dominate
FHA guidelines require that at least 51% of the total living space be residential. This ensures the property is primarily for living, not just commercial activity.
Who This Program Is For:
- First-time buyers purchasing a mixed-use property
- Homeowners who want to live in one unit and rent the rest
- Borrowers who want to combine residential living with small-scale business or rental income
- Buyers in urban areas where mixed-use properties are common
Contact us to see if your mixed-use property qualifies under FHA guidelines.
