Partial Commercial use

[ROBERT JONES]

My subject is a 1200 sq ft rancher and has an 800 sq ft detached garage with loft office converted to an auto repair shop (legal by variance) - the 4150.2 addresses the ability for financing based on the commercial usage being part of the dwelling, what about if it is detached? edit - I thought I was in the HUD forum - sorry.

Any advise is welcomed.

Thanks!

 

[Michigan CG]

Moved to the FHA/HUD section.

 

[Brad Pack]

My subject is a 1200 sq ft rancher and has an 800 sq ft detached garage with loft office converted to an auto repair shop (legal by variance) - the 4150.2 addresses the ability for financing based on the commercial usage being part of the dwelling, what about if it is detached? edit - I thought I was in the HUD forum - sorry.

Any advise is welcomed.

Thanks!

The HOC reference guide reads, in part:

"Areas designed or used for nonresidential purposes shall not exceed 25 percent of the total floor area. Storage areas or similar spaces which are integral parts of the nonresidential portion shall be included in the total nonresidential area."

It sounds as if the property you have described is inelligible for FHA mortgage insurance.

 

[CANative]

So if the guy puts his tool boxes in storage and tells people not to come around anymore is the property then residential (1200 sf house and 800 sf garage)?

Or is the problem that the garage is just too big (more than 25% of the residence)?

 

[Terrel L. Shields]

The house is not used for commercial purposes. However, the use of the garage could affect the value of the property - certainly not a pretty picture conjured up in my mind....ask the client for guidance.

 

[Couch Potato]

The HOC reference guide reads, in part:

"Areas designed or used for nonresidential purposes shall not exceed 25 percent of the total floor area. Storage areas or similar spaces which are integral parts of the nonresidential portion shall be included in the total nonresidential area."

It sounds as if the property you have described is inelligible for FHA mortgage insurance.

If the guy parks his personal vehicle in the garage is it an "integral" part of the nonresidential portion or part of the residential portion? Is a garage floor area if it has a dirt floor?

Your opinion is certainly of more value than mine on the topic. Given that the garage is detached, I would think it is not part of the "total floor area."

 

[Restrain]

The commercial/residential is more appropriately applied to urban areas, especially brownstones, etc, where the first floor is retail, and the upper levels used as living areas.

I would disclose, but the fact that the retail use is secondary would be sufficient to treat the property as a residence with a large garage. That being said, call the HUD office for specific direction.