is a commercial loan necessary for first SFH?

[Benjamin Rogers]

My wife and I are preparing to close on our first rental property. The community bank that I was planning to use says that we will need a commercial loan since it will be a rental. They say that the only way around this is for me to indicate that this property will be our second home. Is this true? I expected to be able to obtain at least 4 mortgages before getting "creative" with financing. Thanks!

[Mark Fedorov]

It depends what you mean as "commercial". If you mean it will be a 5-10 year balloon payment mortgage about 1/2point higher than a residential., then no that is not necessary. By Commercial if they mean they will have to review it as a income producing properity, but you can still get it as a 30 year mortgage (in your name), then yeah... that does not matter, it is their internal paperwork.

Figure out what they mean, and while you are waiting, visit other banks.