Refinancing After Addition of 5th Unit

[Adam Hicks]

Hi all,

We have purchased a 4plex in Louisville, KY on a 20 year note adjustable after 5 years.  We have a basement and I believe we can legally, and totally within our current zoning, add a 5th unit in the basement. 

My question is, assuming we can legally add the unit, what are the impacts to our current note and any opportunity to refinance? We used a local community bank that we had a previous relationship with for the purchase. My understanding is that 5 units becomes a commercial loan, so would we be refinancing into a 15 year note with a lower LTV? If that is the case, might we be better off just keeping our current note?

Thanks for the help in advance!