Mixed-use financing evaluates the residential and commercial portions together, while testing the risks of each. Unit count, square footage, income mix, permitted use, leases and tenant concentration all affect lender fit. There is no universal residential-income percentage that automatically turns a mixed-use building into an apartment loan. Stonehaven arranges financing through third-party lenders.
Start with the building’s actual mix
Show residential units, commercial suites, rentable area by use and annual rent by tenant. Income share and floor-area share answer different questions. Confirm legal use, occupancy approvals, ownership and any operating business connected to the borrower.
Example: area and income can point to different risks
In an illustrative 10,000-square-foot building, 2,000 square feet of storefront space is 20% of the area. If that storefront provides $90,000 of $300,000 in annual contract base rent, it supplies 30% of the rent. Losing that tenant could affect cash flow more than its floor area suggests. These percentages describe the example, not a lender eligibility rule.
What commercial leases change
Tenant concentration
Identify how much rent comes from each commercial tenant and whether tenants are related to the owner. A single storefront can be a material repayment dependency.
Rollover and options
List expiration dates, renewal and termination rights, rent steps and concessions. A lease expiring near the loan maturity changes the exit analysis.
Re-leasing costs
Budget downtime, tenant improvements and leasing commissions. A market-rent assumption does not replace an executed lease or cash to prepare the space.
Expenses and reimbursements
Separate base rent from tax, insurance and maintenance reimbursements. Match recoveries to the expenses so the NOI does not double-count them.
Fannie Mae's multifamily property guidance includes requirements for commercial leases and qualifying income. This is one program framework, not a universal mixed-use approval rule.
How a mixed-use loan is sized
The review starts with supportable property income and operating expenses, then tests debt-service coverage, value and any debt-yield requirement. Residential occupancy does not erase vacant commercial space or a tenant about to leave. The lender may treat the two income streams differently and require reserves or a smaller loan.
Our commercial loan calculator models DSCR and LTV from entered assumptions. Read the loan-sizing guide for a worked example, and ask which NOI adjustments the actual lender will make.
Permanent, bridge or construction financing?
- Stable leases and a longer hold: compare permanent financing, including maturity, prepayment, reserves and guarantees.
- Vacant storefront or renovation: a bridge loan may support a defined leasing or improvement plan. Include the tenant budget and a realistic takeout.
- Conversion, demolition or major development: determine whether construction financing is required. A permitted use and fully costed scope matter before selecting a product.
- Borrower operates the business: discuss owner occupancy and business eligibility separately. An SBA review is not the same as financing a passive rental investment.
Can a mixed-use loan be nonrecourse?
Potential liability depends on the actual lender and documents. Compare full or limited repayment guarantees, carve-outs, completion requirements and environmental obligations. Neither a residential majority nor a strong rent roll guarantees nonrecourse treatment.
What to submit
Send the unit and area breakdown, rent roll, commercial leases and amendments, trailing operating statement, property use, purchase price or payoff, requested loan and intended closing date. Include planned improvements, tenant changes and funds available for vacancies or overruns. Existing debt should include the maturity and any known prepayment restrictions.
Updated September 18, 2026