FHA 203k Mortgages and Mixed Use Properties

One of the great options that the FHA 203k mortgage allows for is for a customer to buy a mixed-use property The definition of a mixed-use property is a property that has a residential component and also has a commercial component.


  • Doctors office
  • Dentist office
  • Law Practice
  • Insurance Company
  • and many more……

The FHA 203k Renovation mortgage for mixed use properties is great for the professional who wants a small office in the house while also living in the property.  The commercial piece can only be a certain percentage of the house and varies by the number of floors- keep in mind that that residential piece must be the majority of the house.

In cities like Philadelphia mixed-use properties are big- you can find 3 and 4 units of residential properties with a small hair salon, professional business, antique seller, and many more.  This is great because as the owner of the property- you live in one unit and then rent out the others.  In this example you could potentially be making money each month and letting your tenants pay your mortgage.

The Perfect Answer!

The FHA 203k program for mixed use is perfect because it allows you to rehab the residential portions of the properties.  You can’t rehab the commercial portion, you can only do the shell- meaning you can do the outside walls and the interior walls but you can’t outfit the doctor’s office or outfit the hair salon- that portion needs to be done by the business owner, which is separate from our transaction.  But, the FHA 203k mortgage does allow you to rehab the other portions of the property, which are the residential components.

A lot of times- most people think that mix-use properties can only get commercial mortgages, but this is not true, you can get an FHA 203k mortgage.  The big thing is finding comparables in the area that allow your property to support the value.  FHA 203k mortgages are the answer for your purchase or refinance of mixed use properties.