Mixed use development financing is designed for business owners and real estate investors who want to finance mixed use buildings. Mixed use buildings eligible for financing usually have several units zoned for various purposes, such as commercial, industrial, cultural, etc. Mixed use loans can be short-term as well as permanent with terms between 6 months and 30 years.
How Mixed Use Development Financing Operates
Mixed use loans are any combination of various kinds of loans, from commercial to hard money to permanent construction and lots more. Almost all buildings that have a minimum of two uniquely zoned units can go into a mixed use loan. In a mixed use building, however, there is often at least a single commercial and a single residential unit that functions as a live/work space or as an investment.
If you own a property with no more than 40% of its earnings coming from the commercial spaces, and it has more than five residential units, you could be eligible for a multifamily loan or an apartment loan.
Types of Mixed Use Loans
There are several types of mixed use loans, the most common being a government-backed mortgage that comes from the SBA or USDA.|Mixed use loans come in varied forms, and the more popular type is a government-backed mortgage provided by the SBA or USDA.|Mixed use loans come in different shapes and sizes, most common of which is a government-backed mortgage from the SBA or USDA.|
Below are the various types of mixed use loans and some useful details:
Government Backed Loans
Business loans offered by the USDA, along with SBA 7a, SBA 504, are some examples of mixed-use loans that have government backing. Such kind of mixed use development financing is permanent, and its terms range from 10 to 30 years. 75% and may reach up to 8. Additionally, SBA 504 loans can be used to fund construction and renovation projects.
Commercial Loans Commercial mixed use loans are the usual loans that can be obtained from banks and lenders, online and physical alike. These loans have terms between 15 to 30 years and interest rates in the range of 4% to 6%. One requirement is that mixed use buildings be in good condition before financing is possible. However, with these loans, the building need not be occupied by the owner.
There are many types of mixed use development financing, including, among several others, private money loans and commercial bridge loans. The terms for these short-term loans range from 6 months to 6 years, and their interest rates begin at 4%, going all the way up to 12%. Short-term mixed use development financing comes in handy for a variety of reasons, such as:
Competing with all-cash buyers
Getting a mixed use building if you want to refinance to a permanent loan
If you fall short of the personal permanent mixed use loan requirements
Buying and renovating a mixed use building that is in poor shape
If you want to refinance to a permanent loan at the close of the term