Is a 12 unit multifamily considered commercial property?

[Anthu Tam]

I am looking into a 12 unit multi-family property and one of my know lender tells that i need a commercial loan. Being new to commercial loans - is there a requirement that will classify a property as commercial? If yes, can you share any lenders offering the loans along with disadvantages with a commercial loan/property or things to watch out for when buying a multi-family property like this?

[Paul Shannon]

Yes, it would be considered commercial if a multifamily has 5 or more units.  Residential loans for 1-4 units.  Commercial you pay a higher rate, shorter-term loan, amortized over 20-25 years, with a balloon payment due at 5,7,or 10 years likely.  I'd look for community banks or credit unions locally for that type of property.