Posted by John Corey on April 19, 2006 at 18:45:26:
Some folks are being sloppy here with terminology.
Did the banker call the property ‘commercial’ or did he really say it as non-owner occupied (NOO) residential. A single family home that is rented is income producing.
Commercial is defined as being 5 units or more multi-family or all the other things like an office building, shopping mall, etc. Residential is 1-4 units independent of if you are living there.
In your last comments you seem to imply the issue is the production of income and not the number of living units.
The loan has to be fit for purpose. If you want to live there then you can get financing as an owner occupant. If you intend to rent all the units then you should expect to pay the going rate for NOO residential.
There are people who borrow on commercial terms when buying 1-4 unit NOO property. They do so for a number of reasons. They are fine with a short loan term and the need for cash in the deal (or lots of real equity).
You want 100% financing. Are you intending to live in one of the units? A plex (2-4 unit building - normally attached but not always) can be financed on owner occupied loan terms.
How many lenders did you check with?