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Securing a Commercial Mortgage for a Mixed-Use Investment Property

Commercial Mortgage
Posted on 
June 28, 2018

As a commercial mortgage broker, you’ll be working with plenty of borrowers who own or are looking to purchase investment properties. Mixed-use buildings are a particularly common property type for which borrowers will be seeking financing, and it’s important to know how to present these properties to small-balance commercial mortgage lenders.

Here’s what you’ll need to provide to a commercial mortgage for a mixed-use investment property:

The documents

When you submit a commercial mortgage request, you need to make sure you provide all of the necessary documentation a lender need to review the scenario. Lenders will differ in terms of what’s required for a submission, but most will need at least a completed 1003 or application, a credit report with scores and trade lines and a summary of the deal. Because in this case your borrower owns an investment property, including a rent roll and information about their tenants is going to be necessary as well.

Information about the property

Your lender will also need to know about the mixed-use building that your borrower is pledging as collateral. Where is it located? How large is it? How many residential and commercial units does the property have? Who rents those units? These are all questions you should be prepared to answer.

The use of proceeds

Whether your borrower is looking to pay off a mortgage or other debt, do some work to the property or purchase another mixed-use property, it’s important for you as the broker to know this information so that you can convey it to the lender. Include your borrower’s plans for the money in the summary of the deal.

The borrower’s capacity to pay

Every lender is going to want to be sure that a borrower can make their monthly payments. To give your lender an idea of your borrower’s ability to repay, include any relevant financial documents, including a rent roll, tenant leases and an income and expense report.

Mixed-use buildings are a reliable segment of the commercial mortgage market for brokers. These properties exist all over the country, and their owners are often seeking a commercial mortgage for any number of reasons. Knowing the information that a lender will need to review and finance a request for a mixed-use investment property will help you to close more deals and earn additional income.


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