Questions About FHA Loan

[Ryan Lee]

Hi everyone,

It's great to be here and I want to thank everyone in advance for their help and to have this community.

My questions involve mixed use properties.

Can a mixed-use property containing 3 residential and 1 commercial space be purchased using an FHA loan or does it have to be only residential units?

If yes, can I occupy the commercial space and that would be considered owner occupied?

Is there a minimum time frame that the owner-occupant must reside in the FHA approved property, before they can rent out their unit?

Thank you,

Ryan

[Troy Sheets]

You can purchase a property with commercial space via FHA loan, I believe up to 25% of the space can be commercial, the rest must be residential. As far as occupying the commercial space, that'll depend on zoning; the FHA and the mortgage company aren't going to let you do anything illegal. If the property is mixed use you may be able to convert the commercial space to residential and then occupy the converted space but you'd have 60 days to accomplish this and move in. Depending on how flexible the mortgage underwriter is, they may or may not allow the above. They're the ones that really make the decisions believe or not.

Why not keep the commercial space and rent it as-is and take over one of the residential units? Again, you'd have to occupy within 60 days of purchase so you'll need to make sure one of the leases would allow you to move in within that time frame. If the existing tenants have 1 year leases that still have 6 months left on them it's a no go.