Arizona Mortgage Team

Arizona Mortgage Rates. Refinance FHA, VA and Jumbo Mortgage Loans.

  • Loan Programs
    • FHA Loans
      • FHA 203k Loan
      • FHA Streamline Refinance
      • FHA Kiddie Condo Loan
    • VA Loans
    • USDA Loans
    • HomePath Loans
    • Interest Only Mortgage Loans
    • Refinancing
    • Reverse Mortgages
      • Reverse Mortgage Quote
  • Insurance
    • Arizona Car Insurance
    • Arizona Homeowner Insurance
    • Arizona Life Insurance
    • Arizona Renters Insurance
  • Press
  • Blog

FHA Guidelines on Mixed-Use Properties

December 18, 2010

From time to time we get an inquiry from someone who wants to have an FHA loan on a property that they also want to have a small business run out of.

For example, someone wants to buy a home and also run a day care facility from their home.

When it comes to FHA loans, you want to be sure to follow the rules when it comes to mixed use properties — otherwise, it could pose a problem.

FHA Guidelines on Mixed-Use Properties

A mixed-use property is a property has been modified to accommodate a small business, such as

  • a day care facility
  • a hair care salon
  • a professional service office like a medical or financial office
  • a photography studio

in addition to having the residents live in the property.  Anytime a property is going to be used for business and residential purposes, the appraiser must specify that the property is being used for that purpose.

Mixed-Use Properties Allowed For FHA Loans With Conditions

Mixed-used properties are allowed with the following restrictions:

  • Must be single family detached owner-occupied dwelling;
  • Must represent a legal, permissible use of the property under the local zoning requirements;
  • Borrower must be both the owner and the operator of the business.
  • Property must be primarily residential in nature;
  • There may not be any structural changes that affect the marketability of the property;
  • Market value of the property must be primarily a function of its residential characteristics rather than the business use of any special-use modifications that were made.

Just a couple more notes on getting an FHA loan for mixed-use properties:

  1. Mixed-use properties in urban areas where the business is at street level and the living quarters are either upstairs or behind the business are also acceptable. The appraisal should illustrate through use of similar and approximate comparable sales that this type of residential/business use is common to the area.
  2. Also eligible: condominium projects that do not have more than 20% of the floor space of the common areas devoted to commercial retail space, subject to credit policy verification that the investors will still accept this type of project.

Have more questions about mixed use properties and FHA loans? Be sure to contact one of our experts.

Filed Under: FHA Loans Tagged With: fha loan mixed use property, mixed use property fha loan, mixed-use properties

Recent Items

  • How Does a VA Streamline Work?
  • Can you Use a Mortgage Assumption after a Divorce?
  • What are the Major USDA Streamline Guidelines?
  • How is the USDA Monthly Guarantee Fee Calculated?
  • How to Purchase USDA Foreclosed Homes?

Latest News

  • How Does a VA Streamline Work?
  • Can you Use a Mortgage Assumption after a Divorce?
  • What are the Major USDA Streamline Guidelines?
  • How is the USDA Monthly Guarantee Fee Calculated?
  • How to Purchase USDA Foreclosed Homes?

Search

IMPORTANT MORTGAGE DISCLOSURES:

When inquiring about a mortgage on this site, this is not a mortgage application. Upon the completion of your inquiry, we will work hard to match you with a lender who may assist you with a mortgage application and provide mortgage product eligibility requirements for your individual situation.

Any mortgage product that a lender may offer you will carry fees or costs including closing costs, origination points, and/or refinancing fees. In many instances, fees or costs can amount to several thousand dollars and can be due upon the origination of the mortgage credit product.

When applying for a mortgage credit product, lenders will commonly require you to provide a valid social security number and submit to a credit check . Consumers who do not have the minimum acceptable credit required by the lender are unlikely to be approved for mortgage refinancing.

Minimum credit ratings may vary according to lender and mortgage product. In the event that you do not qualify for a credit rating based on the required minimum credit rating, a lender may or may not introduce you to a credit counseling service or credit improvement company who may or may not be able to assist you with improving your credit for a fee.

Copyright © Mortgage.info is not a government agency or a lender. Not affiliated with HUD, FHA, VA, FNMA or GNMA. We work hard to match you with local lenders for the mortgage you inquire about. This is not an offer to lend and we are not affiliated with your current mortgage servicer.

Contact Us | Terms of Use | Privacy Policy

Buy Mortgage Leads

Mortgage.info

NMLS ID #1237615 | AZMB #0928735

8123 South Interport Blvd. Suite A, Englewood, CO 80112

CLICK TO SEE TODAY'S RATES

Contact Us