Are Multi-Family units Commercial

[Patrick O'Neill]

Hello BiggerPockets Community,

I was listing to/watching one of the BiggerPockets webinars, and Brandon Turner mentioned that he liked 2, 3 and 4 family multi-unit properties because they are considered residential... 

I did a quick search online as well as on BiggerPockets, and though I am certain the answer is out there, I couldn't quickly track it down. So, though up to 4 units is considered residential, is there a certain number of units per building that then makes it become commercial real estate? I was searching for Pennsylvania (even Philadelphia specifically) as I know that laws can change depending on the jurisdiction.

If there is a quick answer to this, that would be great, but I realize that it may be  a case by case matter. 

Thanks BiggerPockets Community and Best of Luck!

[Brad M.]

Five units and up is considered commercial. This impacts the type of financing that you are able to obtain on them. Four and under you can get a traditional 30-yr mortgage like you do on your residence. Once you are in the commercial realm, the lending terms differ (shorter amortization, shorter term to maturity, etc.)