There are many different types of commercial mortgages; the property type and ownership will generally determine the type of commercial mortgage available.  One very common type is the commercial loan for an owner occupied property.

An owner occupied property is defined by Accu-Pro Financial (a national leader of commercial loan services) as a property where the owner’s own business occupies at least 51% of the property.

Many business owners prefer to own the property where their business is located because it provides them the ability to control their costs, earn tax write offs, and build equity.  In general, apartment complexes, farms and mines are considered investor properties and do not usually qualify as owner occupied properties even if the owner lives on the property.  The term owner occupied as it relates to commercial mortgages refers to the business and not to where the person resides.

Commercial loans are usually drawn up for terms ranging from 5 to 30 years.  Applicants are usually required to have a down payment which can be at least 25% (10% if SBA or USDA eligible) of the total loan plus closing costs.  Closing fees usually include appraisal, environmental, inspection and points and can usually cost between 1% and 3% of the total loan amount.  A commercial loan applicant must be ready to provide documentation, including personal and business tax returns as well as a personal financial statement.

Businesses that are trying to obtain owner occupied commercial loans should contact a qualified commercial lender like Accu-Pro Financial to discuss their particular situation.  Keep in mind that the rules and regulations, as well as interest rates and other loan related policies vary by lender and by state.

There are far fewer lenders offering commercial loans at reasonable rates and terms today than there were 12 months ago so do your due diligence and contact a company that has a good reputation in the market place or you can apply here.