Owner Occupied Commercial Loans

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A property is generally accepted to be owner occupied when 51% or more of the property’s space is occupied by the business of the person or entity that owns the real estate.It is also generally considered to be owner occupied if it is occupied by a business that has the same ownership of a holding company that owns the property.By example if Bob owns 100% of an ice cream shop and then he owns 51% or greater of a holding company called Bob’s real estate and that holding company owns the real estate the ice cream shop occupies that would generally be classified as owner occupied.There are many different variations of this that will be classified as owner occupied commercial real estate.The point being is that they will all qualify for one type of commercial loan or another.

Examples of a typical borrower looking for an owner occupied commercial loan:
  • Business owner looking to purchase a commercial building for his/her business.
  • Business owner looking to purchase a commercial building where his/her business.
  • Will occupy at least 51% and the remaining portion will be leased to tenants.
Purpose

A commercial loan to purchase an owner occupied property can be used for almost any type of property that is not specifically investor related such as an apartment building.Additionally, farms, mining and other types of agricultural properties are not generally permitted under a traditional commercial loan.

Structure

Owner occupied commercial loans are generally written with 5, 7, 10, 15, 20, 25 and 30 year terms with or without balloons.In general for a purchase a borrower will be expected to put down 20% plus closing costs (SBA and USDA loans are usually only 10% which we offer).

Paperwork

For this type of commercial loan expect to provide full documentation including tax returns for the guarantor(s) and the business that will occupy the space as well as personal financial statements on the guarantor(s).Additionally, credit will be pulled on the guarantor(s) as well as a D&B report on the business.

Fees

Commercial loans generally come with fees for things like appraisal, title work, environmental reports and points.

Most of our commercial loans do not require the borrower to use their house as collateral.There may be a rare instance where this is necessary such as a shortfall of collateral or as a credit enhancement to improve the strength of your commercial mortgage request.

Credit requirement of our commercial loans:

We have commercial loan products that can help people with significantly impaired credit, these have higher commercial loan rates, and we also have commercial loan programs for people with great credit that deserve the best rates we have to offer.


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