You found a building with shops on the street level and apartments upstairs. Now you need a lender that understands both halves of the rent roll.
In short: Mixed-use property loans finance buildings that combine commercial space, such as retail or office, with residential units, and LendingStreet finances them for investors on custom terms, typically $500K to $5M+. Underwriting looks at the whole building’s net operating income, with the commercial leases and apartment rents reviewed separately. The share of space and income that is commercial often decides which program fits. Business-purpose, non-owner-occupied investment property only.
A mixed-use building has two income streams that behave differently. Apartment rents are short leases that reset often. Retail and office leases run longer, carry more vacancy risk between tenants, and may include expense reimbursements.
Because of that, a residential-only lender may decline the deal, and a bank may want years of tax returns. Our programs treat the building as an income property and look at what it actually earns.
The first question is how much of the building is commercial. A corner building with one small storefront and five apartments reads mostly residential. A building with three retail bays and two apartments reads mostly commercial.
The split shows up in square footage and in income. Where the commercial portion is small, some programs underwrite closer to a residential rental. Where it is large, the loan is sized on full commercial terms.
Upstairs, the review is familiar: current leases, market rents, unit condition and occupancy. Downstairs, the review goes deeper into each commercial lease.
Expect questions about remaining lease term, who pays taxes and insurance, renewal options and how long the space sat empty before the current tenant. A ground-floor restaurant or other heavy-use tenant can also bring questions about build-out and equipment.
| Item | Residential units | Commercial units |
|---|---|---|
| Lease length | Usually 12 months or month-to-month | Often multi-year with options |
| Vacancy assumption | Based on local apartment demand | Often higher, reflects time to re-lease |
| Expenses | Owner usually pays most | May be shared or reimbursed by tenant |
| Key documents | Leases and rent roll | Full leases, amendments, estoppels when required |
Example only, not a quote. An investor is buying a two-story building for $1,200,000. It has two retail units downstairs at $2,500 a month each and four apartments upstairs at $1,400 a month each.
Gross rent is $10,600 a month, or $127,200 a year. After an assumed 35% for vacancy, taxes, insurance, repairs and management, net operating income is about $82,680. With an assumed loan of $840,000 (70% of price) and annual payments of about $72,000, the debt service coverage ratio is roughly 1.15x.
| Line | Example amount |
|---|---|
| Purchase price | $1,200,000 |
| Retail rent (2 units) | $60,000 / yr |
| Apartment rent (4 units) | $67,200 / yr |
| Vacancy and expenses (35%) | -$44,520 / yr |
| Net operating income | $82,680 / yr |
| Assumed loan (70%) | $840,000 |
| Assumed annual debt service | $72,000 |
| DSCR | About 1.15x |
Some buildings are not ready for long-term debt. A vacant storefront, apartments that need renovation or rents well below market can all push coverage too low for a permanent loan.
In that case, a bridge loan can fund the purchase and work, and a longer-term loan replaces it once the building is leased. Plan the exit before you close the first loan.
A clean package gets a faster, more accurate quote. Send the rent roll, every commercial lease, the last 12 months of operating numbers if the seller has them, the purchase contract and a few photos of each floor.
Our financing team reviews the deal and typically brings back 2–3 options, often within 48 hours. Your loan officer will tell you early if a document could change the terms.
Sometimes. When the commercial portion is small, some residential DSCR programs will consider the building. When the commercial share is larger, the loan is underwritten on the property’s full net operating income instead.
Our mixed-use programs are underwritten mainly on the property’s income, not your personal tax returns. You will still provide property-level documents such as leases, a rent roll and operating history, plus credit and entity documents.
No. LendingStreet finances business-purpose, non-owner-occupied investment property only. If you plan to live in the building, you would need a different type of financing.
A vacant storefront lowers current income, so a long-term loan may be smaller or may not fit yet. A short-term bridge loan can fund the purchase while you lease the space, then a permanent loan takes over.
Commercial and mixed-use loans are set on custom terms, so leverage depends on the income, the lease mix, your experience and the market. Your loan officer can show you real numbers once the rent roll and leases are reviewed.
2-3 competing quotes from 30+ capital sources. No credit pull. No commitment.
By clicking, you provide express written consent to be contacted by LendingStreet (NMLS #1734316) via SMS, phone, or email, possibly using automated technology, regarding your loan inquiry. Reply STOP to opt out. Consent is not required to obtain services. See our Privacy Policy and Terms.