Buildings of five to ten units
Buy or refinance a small apartment building. Because a building this size is valued much like a small commercial property, the appraisal looks at the rent roll and the building’s income and expenses.
Commercial property loans
Loans for small apartment buildings and mixed-use property.
Business-purpose loans for investors, based on the property’s rent rather than your personal income: residential buildings of five to ten units, small mixed-use buildings, and several rental homes under one loan. Here is what we offer and how to start.
Prefer to talk? Call 732-686-9999
- Direct, licensed mortgage lender
- NMLS #103098
- Equal Housing Lender
What would you like to do?
Pick the one closest to you. A few short questions follow, and a licensed loan officer gets back to you.
- Buy an apartment or mixed-use building
- Refinance a building I own
- Put several rentals under one loan
Ready for the full application? Apply online
Fidelity Residential · NMLS #103098 · Equal Housing Lender
- Direct, licensed lenderNMLS #103098. Check our licences on NMLS Consumer Access.
- A licensed loan officerA real person reviews your deal and answers your questions.
- Based on the rentThe building’s rent, not your personal income, carries the loan.
- Apply online or by phoneStart a quote, apply online or call 732-686-9999.
What we finance
Small apartment buildings, mixed use and portfolios
Each of these is a business-purpose loan for investment property, underwritten mainly on the rent the property brings in.
Small mixed-use buildings
Buildings of two to eight units with shops, offices or a restaurant on part of the property. Most of the building must be residential, and the commercial space must be leased. In some programs your own business may use one of the commercial units.
Several rentals under one loan
Some programs let experienced investors finance a limited number of rental homes, all in the same state, under one loan. A property can be released from the loan when you sell it, on terms set in the loan documents.
The basics
How these loans are underwritten
The rent carries the loan. The lender compares the building’s total rent with its full monthly payment, including taxes, insurance and any association dues. The rent must cover the payment by the margin the program sets. No tax returns or pay stubs are used.
Rent is counted carefully. Any management fee the appraiser shows is taken off the rent first, vacant units count at only part of their market rent, and the number of vacant units is limited. Short-term rental income is not counted on these buildings.
Expect a closer look than on a single rental. Programs ask for a larger down payment and more savings in reserve than on a one-unit rental, and they usually want a landlord with a recent record of owning and managing rental property.
What lenders look at
- The rent roll and leases, unit by unit
- The appraisal, with an income and expense statement and, often, a second valuation
- Your credit and that of each owner who signs
- Your experience as a landlord
- Cash for the down payment, closing costs and reserves
Buying a smaller rental? For a house or a building of up to four units, see DSCR rental property loans, based on the rent, or investment property loans, based on your income.
How it works
From first call to closing
Tell us about the property
The number of units, any commercial space, the current leases and rent roll, any vacancies, and how you will hold title, usually in a company.
Experience and credit
We confirm your record of owning and managing rental property and pull credit for each borrower and each owner who signs.
Appraisal and rent
The appraiser inspects every unit and reports the market rents, income and expenses. The rent the lender counts is then compared with the full payment.
Sign and close
You sign business-purpose and occupancy statements, and the owners back the loan personally. Rent-loss insurance is required, and mixed-use buildings also need commercial liability cover.
Documents
What to have ready
No tax returns or pay stubs. Most investors can start with these.
- The rent roll and current leases for every unit
- The building’s income and expense statement
- Company documents if you hold title in a company
- A list of the properties you own and your record as a landlord
- Bank statements for the down payment, closing costs and reserves
- Your purchase contract, or the current mortgage statement on a refinance
- Photo identification for each borrower and each owner who signs
Questions
Common questions about commercial property loans
Can I or my family live in one of the units?
No. These are business-purpose loans for investment property, and you sign a statement that no one on the loan will live in the building.
Do I need experience as a landlord?
Usually, yes. Most programs for buildings of this size want a recent record of owning and managing rental property. Tell your loan officer about the properties you own now.
Can short-term rental income count?
Not on these buildings. A unit let by the night or week is not counted toward the rent. For a single short-term rental, ask about our DSCR rental loans.
Is there a prepayment penalty?
Many business-purpose rental loans have one for the first years, where state law allows it, and some programs offer a version without one. Your loan officer can show you both.
Do you finance office, retail or other purely commercial buildings?
The loans on this page are for buildings that are mainly residential. If your property is purely commercial, call us to talk it through before you apply.
Do you lend in my state?
Fidelity Residential is licensed in many states. The full, current list is on NMLS Consumer Access (opens in a new tab), or call us at 732-686-9999.
Have a property in mind?
Tell us about the building, or talk it through with a licensed loan officer.
This page is general information, not a commitment to lend. Programs, terms and eligibility depend on credit, income, property and underwriting review and are subject to change without notice. Business purpose investor loans are for investment property only.