Mixed-Use Property Loans in New York City: Residential & Commercial Financing (2025)

New York City is the undisputed capital of mixed-use real estate in the United States. From brownstone Brooklyn storefronts with apartments above to massive new residential towers with ground-floor retail mandated by zoning, the mixed-use building is woven into the DNA of every borough. More than 30,000 mixed-use properties exist across the five boroughs, generating billions of dollars in combined residential and commercial income each year. For investors, developers, and small business owners, financing these properties requires understanding how lenders classify mixed-use buildings and which loan programs deliver the best terms.

Clear House Lending provides mixed-use property financing across all five NYC boroughs, including SBA loans, bridge financing, DSCR loans, and conventional commercial mortgages. Whether you are acquiring a two-story retail-and-residential building in Astoria or developing a new mixed-use project in the Bronx, this guide covers everything you need to know about mixed-use loans in New York City. For a broader overview of all commercial financing options in the city, visit our New York City commercial loans hub page.

What Is a Mixed-Use Property and How Do NYC Lenders Define It?

A mixed-use property combines two or more use types within a single building or development. In New York City, the most common configuration is residential-over-retail, where upper floors contain apartments and the ground floor houses a commercial tenant such as a restaurant, bodega, medical office, or salon. Under the NYC Zoning Resolution (ZR 12-10), a "mixed building" specifically refers to a structure containing both residential and commercial uses.

Lender classification matters enormously for mixed-use borrowers in NYC. The residential-to-commercial ratio determines which loan programs are available, what interest rates you qualify for, and how much leverage a lender will extend.

The 51% Residential Threshold: Most agency and government-backed loan programs, including FHA and SBA loans, require that at least 51% of the building's total square footage serve a residential purpose. Buildings that meet this threshold can access more favorable residential lending terms, lower interest rates, and higher loan-to-value ratios.

The 75-80% Residential Preference: Many conventional commercial lenders and Freddie Mac mixed-use programs strongly prefer properties where 75% to 80% or more of the square footage is residential. At this ratio, the property is treated essentially as a multifamily asset with incidental commercial space, unlocking the best rates and non-recourse options with 30-year amortization.

Majority Commercial Classification: When commercial space exceeds 49% of the building's square footage, the property is classified as a commercial asset. This means higher interest rates, shorter loan terms, and larger down payment requirements. Lenders view these properties as riskier because commercial tenants can take four months or longer to replace, compared to weeks for residential units.

Understanding where your target property falls on this spectrum is the first step in structuring the right financing. Use our commercial mortgage calculator to model payments under different loan scenarios.

What Mixed-Use Loan Programs Are Available in New York City?

NYC mixed-use borrowers have access to a wide range of financing options. The right program depends on your property's residential-to-commercial ratio, your occupancy status, investment timeline, and financial profile.

SBA 7(a) Loans are among the most powerful tools for owner-occupied mixed-use properties. If you operate a business from the commercial portion while living in or renting out the residential units, the SBA 7(a) program allows financing up to 90% loan-to-value with down payments as low as 10%. The borrower's business must occupy at least 51% of the total square footage. Rates currently range from 6.50% to 8.00%, with terms up to 25 years. Learn more in our SBA loan guide for commercial real estate.

SBA 504 Loans provide long-term, fixed-rate financing for mixed-use properties where the borrower's business occupies at least 51% (or 60% for new construction). The 504 structure combines a conventional first mortgage with a CDC-backed second mortgage, delivering blended rates starting around 5.64%. This program is especially attractive for NYC small business owners purchasing their building rather than paying rent.

Conventional Commercial Mortgages serve stabilized mixed-use properties with strong occupancy and documented cash flow. Fixed rates for 5, 7, or 10 years with 25 to 30 year amortization are standard. Down payments typically range from 25% to 35%, which in NYC can mean significant capital given property values that routinely exceed $1 million even for small buildings.

DSCR Loans evaluate the property's rental income rather than the borrower's personal income, making them ideal for investors with multiple properties or complex tax returns. DSCR loan programs in NYC typically require a minimum debt service coverage ratio of 1.25x. Rates range from 6.25% to 8.50%, and down payments of 20% to 35% are standard. Check our DSCR loan requirements guide for detailed eligibility criteria.

Bridge Loans provide short-term financing for acquisitions, lease-up periods, and value-add renovations. In NYC's competitive market, bridge financing lets you close quickly on a mixed-use building while stabilizing occupancy or completing renovations before refinancing into a permanent loan. Rates range from 7.50% to 10.50% with terms of 6 to 36 months. Our commercial bridge loan guide covers the full process.

Freddie Mac Mixed-Use Loans are available for properties where residential use makes up at least 80% of the total square footage. These loans offer fixed rates for 5, 7, or 10 years, 30-year amortization, and non-recourse terms. Closing typically takes about 60 days, and the program is popular for larger NYC mixed-use buildings with strong multifamily components.

What Are Current Mixed-Use Loan Rates in NYC?

As of February 2026, mixed-use property loan rates in New York City reflect the broader commercial lending environment. The 5-year Treasury sits at 3.729% and the 10-year Treasury at 4.187%, forming the base for most fixed-rate commercial products.

Rates vary significantly depending on the loan program, the property's residential-to-commercial ratio, occupancy, borrower creditworthiness, and leverage. Properties with a higher residential component generally qualify for lower rates because lenders view residential rental income as more stable and predictable than commercial lease income.

Loan-to-value ratios for mixed-use properties in 2025 and 2026 typically range from 65% to 75% for conventional programs, though SBA loans push up to 90% for qualified owner-occupants. Higher-leverage deals may carry rate premiums of 50 to 100 basis points.

Use our DSCR calculator to estimate whether your mixed-use property's net operating income supports the debt service at current rates.

How Does NYC Zoning Affect Mixed-Use Property Financing?

New York City's zoning framework directly shapes what can be built, how buildings are classified, and ultimately how they are financed. Understanding the zoning context is critical for both acquisitions and development projects.

MX Zoning Districts are specifically designed to encourage mixed-use development. These districts pair manufacturing zones (M1) with residential zones (R6 through R10) to create live-work communities. MX districts are found throughout Brooklyn, Queens, and Manhattan, particularly in neighborhoods transitioning from industrial to residential use. Properties in MX zones can combine light manufacturing, commercial, and residential uses, which creates flexible investment opportunities but also adds complexity to loan underwriting.

The Midtown South Mixed-Use Plan (MSMX), approved by the NYC Council in August 2025, represents the largest housing-focused rezoning the city has adopted in more than two decades. This 42-block rezoning of Midtown South replaces outdated manufacturing-only zoning with mixed-use districts allowing 15 to 18 FAR of residential development and 12 to 15 FAR of non-residential development. The plan is expected to facilitate over 9,500 new housing units, including 2,800 permanently affordable units under Mandatory Inclusionary Housing requirements. For investors and developers, this creates a wave of new mixed-use development opportunities in one of Manhattan's most transit-rich corridors.

Commercial Overlay Zones (C1 and C2) permit ground-floor commercial uses within otherwise residential zoning districts. These overlays are the zoning mechanism behind the classic NYC streetscape of shops and restaurants at street level with apartments above. Properties in commercial overlay zones are common targets for mixed-use financing.

Ground-Floor Retail Requirements apply in many new development projects, particularly those receiving zoning bonuses or tax incentives. The city's 421-a replacement program and other incentive structures often mandate active ground-floor commercial or community facility uses. This means new mixed-use construction projects must plan for and finance commercial space from the outset.

City of Yes for Housing Opportunity, the broader zoning reform adopted in late 2024, further encourages mixed-use development by allowing residential construction in previously commercial-only districts and streamlining approvals for mixed-use projects citywide.

Where Are the Best NYC Neighborhoods for Mixed-Use Investment?

Mixed-use investment opportunities exist across all five boroughs, but certain neighborhoods stand out for their combination of demand, zoning flexibility, and financing potential.

Brownstone Brooklyn (Park Slope, Carroll Gardens, Cobble Hill, Fort Greene) contains some of the most iconic mixed-use properties in the city. Classic two-to-four-story brownstones with ground-floor retail and upper-floor apartments trade at premium prices but generate stable, diversified income. Cap rates for stabilized mixed-use brownstone buildings in prime Brooklyn neighborhoods range from 4.0% to 5.5%.

Bushwick and Ridgewood are among the fastest-growing mixed-use markets in NYC. Inventory increased 30.3% in 2025, creating new acquisition opportunities for investors willing to enter transitioning neighborhoods. Many properties sit in MX zoning districts that allow creative combinations of residential, commercial, and light industrial uses. Financing here often involves bridge loans for value-add repositioning before refinancing into permanent debt.

Astoria and Long Island City, Queens offer strong mixed-use fundamentals with excellent transit access. Long Island City boasts some of the highest rental yields in the city, and the neighborhood's ongoing development pipeline includes significant mixed-use components. Astoria's commercial corridors along Broadway and Steinway Street feature dozens of mixed-use buildings with ground-floor restaurants and retail below apartments.

Mott Haven and the South Bronx represent the most aggressive growth opportunity for mixed-use investors. New waterfront developments are bringing Class A residential with ground-floor retail to a market where acquisition prices remain well below Manhattan, Brooklyn, and Queens. Mixed-use cap rates in the South Bronx range from 5.5% to 7.0%, offering meaningful cash-on-cash returns.

Washington Heights and Inwood, Manhattan provide a rare combination of Manhattan addresses with outer-borough pricing. Mixed-use buildings along Broadway and St. Nicholas Avenue feature long-established commercial tenants and rent-stabilized residential units, creating stable but sometimes complex financing scenarios.

TriBeCa and the Meatpacking District maintain vacancy rates of just 2% to 5%, making them among the tightest mixed-use markets in the country. Properties here command premium pricing and attract institutional capital, with cap rates of 3.5% to 4.5%.

What Are the Unique Challenges of Financing Mixed-Use Properties in NYC?

Mixed-use lending in New York City carries complexities that borrowers in other markets rarely encounter.

Rent Stabilization affects a substantial portion of NYC's older mixed-use housing stock. Buildings with rent-stabilized residential units face income limitations that reduce debt service coverage ratios and may require lenders to apply more conservative underwriting assumptions. The Housing Stability and Tenant Protection Act of 2019 further restricted rent increases and eliminated most pathways to deregulation, which has permanent implications for how lenders value these properties.

High Property Values and Capital Requirements mean that even "small" mixed-use buildings in NYC require significant equity. A typical two-story mixed-use building in a desirable Brooklyn neighborhood might sell for $1.5 million to $3 million. At 25% down, that is $375,000 to $750,000 in equity before closing costs, legal fees, and reserves.

Local Law 97 Compliance imposes carbon emissions caps on buildings over 25,000 square feet. Mixed-use buildings approaching this threshold must budget for energy efficiency upgrades or face penalties starting in 2024 for the largest buildings and 2030 for smaller ones. Lenders are increasingly factoring LL97 compliance costs into their underwriting.

Complex Income Verification is common with mixed-use properties because lenders must evaluate both residential rental income and commercial lease income separately. Commercial leases with near-term expirations, percentage rent clauses, or tenant improvement obligations can reduce the income that lenders are willing to underwrite.

Certificate of Occupancy Issues arise frequently in older NYC mixed-use buildings where the actual use may not match the certificate of occupancy on file. Correcting CO issues can be expensive and time-consuming, and most lenders will not close until the CO accurately reflects the building's current use.

Contact our team to discuss how to navigate these challenges for your specific property.

How Should You Structure a Mixed-Use Deal in NYC for the Best Financing Terms?

Deal structure can make or break your mixed-use financing in New York City. Here are the strategies that experienced investors use to secure the most favorable loan terms.

Maximize the Residential Ratio: If you are acquiring a property where the residential-to-commercial split is close to a classification threshold, consider whether reconfiguring space could push the ratio above 51%, 75%, or 80% residential. Even converting a small portion of underperforming commercial space to residential use can unlock significantly better loan programs and rates.

Secure Long-Term Commercial Leases: Lenders discount commercial income from leases with less than three years remaining. Before applying for financing, work to extend existing commercial leases or sign new tenants to five-year or longer terms. Strong commercial leases with established tenants (pharmacies, medical practices, national chains) carry more weight in underwriting than month-to-month arrangements.

Separate Residential and Commercial Components: For larger mixed-use developments, consider whether financing the residential and commercial portions separately produces better overall terms. A residential first mortgage paired with a mezzanine or subordinate loan on the commercial component can sometimes deliver lower blended costs than a single mixed-use loan.

Use Bridge-to-Permanent Strategy: For value-add mixed-use acquisitions, a bridge loan covers the acquisition and renovation period, after which you refinance into a permanent loan once the property is stabilized with strong occupancy and documented income. This two-step approach often produces better permanent loan terms than trying to obtain permanent financing on an unstabilized asset.

Leverage SBA Programs for Owner-Occupants: If you plan to operate a business from the commercial space, SBA loans offer 90% financing that is nearly impossible to match with any other program. The 10% down payment advantage is especially powerful in NYC's high-price market.

Ready to structure your mixed-use deal? Contact Clear House Lending for a personalized financing analysis.

What Is the Outlook for Mixed-Use Investment in NYC Through 2026 and Beyond?

The mixed-use property sector in New York City is positioned for sustained growth driven by several converging forces.

Zoning Reform Creates New Supply: The Midtown South Mixed-Use Plan and City of Yes reforms are unlocking thousands of new mixed-use development sites across the city. The MSMX plan alone could generate 9,500 new housing units in Midtown South, many in mixed-use configurations with mandatory ground-floor commercial or community facility space.

Office-to-Residential Conversions: The city's surplus of obsolete Class B and C office space is creating a pipeline of mixed-use conversion opportunities. Buildings that once served purely commercial functions are being reimagined as residential towers with ground-floor retail. These conversions are eligible for tax incentives and have attracted significant investor interest.

Outer Borough Growth: Brooklyn, Queens, and the Bronx continue to see rising demand for mixed-use product as residents seek walkable, transit-oriented neighborhoods with retail amenities at their doorstep. Development pipelines in Bushwick, Gowanus, Long Island City, and Mott Haven are heavily weighted toward mixed-use configurations.

Retail Resilience: Manhattan retail corridors are posting strong foot traffic and rising rents, with average asking rents reaching $697 per square foot in prime locations. This strengthens the commercial income component of mixed-use properties and supports stronger debt service coverage ratios for borrowers.

Interest Rate Trajectory: With Treasury yields stabilizing and most market forecasters expecting gradual rate easing through 2026, financing conditions for mixed-use acquisitions and development are poised to improve modestly over the next 12 to 18 months.

What Documents Do You Need for a Mixed-Use Loan Application in NYC?

Mixed-use loan applications in New York City require comprehensive documentation covering both the residential and commercial components of the property.

Property Documentation: Current rent roll showing all residential and commercial tenants, lease terms, and monthly rents. Trailing 12-month operating statements with itemized income and expenses. Prior two years of property tax returns (if applicable). Certificate of occupancy confirming the building's legal use. Environmental reports (Phase I, and Phase II if flagged). Recent property appraisal or broker opinion of value.

Borrower Documentation (except DSCR loans): Personal tax returns for the prior two years. Personal financial statement listing all assets and liabilities. Bank statements showing liquidity for down payment and reserves. Resume or track record of real estate investment experience. Entity documents if purchasing through an LLC or corporation.

Commercial Lease Documentation: Copies of all commercial leases currently in effect. Lease abstracts summarizing key terms, expiration dates, and renewal options. Tenant financials or credit information for major commercial tenants. Estoppel certificates confirming lease terms with existing tenants.

NYC-Specific Requirements: Local Law 97 energy benchmarking data for buildings over 25,000 square feet. Verification of rent stabilization status for any regulated residential units. Department of Buildings violations search and resolution documentation. Certificate of occupancy alignment with current use.

What Are the Most Common Questions About Mixed-Use Loans in NYC?

Can I get an SBA loan for a mixed-use building if I only occupy the commercial space?

Yes, SBA loans are specifically designed for owner-occupied commercial properties, and mixed-use buildings qualify as long as your business occupies at least 51% of the total square footage (or 60% for new construction under SBA 504). You do not need to live in the residential portion. The residential units can be rented to tenants, providing additional income that strengthens your loan application. SBA 7(a) loans offer up to 90% financing with down payments as low as 10%, making them one of the most accessible programs for NYC small business owners purchasing mixed-use property.

What credit score do I need for a mixed-use property loan in NYC?

Credit score requirements vary by loan program. Conventional commercial mortgages typically require a minimum score of 680. SBA loans may accept scores as low as 650, though stronger scores produce better rates. DSCR loans generally require a minimum of 640. Hard money lenders focus primarily on the property's value rather than credit score. In practice, borrowers with scores above 720 receive the most competitive rates and terms across all mixed-use loan programs.

How long does it take to close a mixed-use loan in New York City?

Closing timelines depend on the loan program and property complexity. Conventional commercial mortgages typically close in 45 to 60 days. SBA loans take 60 to 90 days due to additional government underwriting requirements. Bridge loans and hard money loans can close in as few as 7 to 14 days, which is critical for competitive NYC bidding situations. Properties with certificate of occupancy issues, rent stabilization complications, or environmental concerns may require additional time to resolve before closing.

Do rent-stabilized units affect my ability to get a mixed-use loan?

Rent-stabilized units do not disqualify you from obtaining a mixed-use loan, but they do affect underwriting. Lenders apply more conservative income projections for regulated units because rent increases are limited by the Rent Guidelines Board. Properties with a high percentage of rent-stabilized units may qualify for lower loan-to-value ratios. That said, many NYC lenders have specialized programs for rent-stabilized mixed-use buildings, and the stability of regulated tenancy can actually be viewed as a positive by certain lenders who value predictable occupancy over maximum rent potential.

What is the minimum down payment for a mixed-use property in NYC?

The minimum down payment ranges from 10% for SBA loans (owner-occupied) to 25% to 35% for conventional commercial mortgages and 20% to 35% for DSCR loans. Given NYC property values, even a 10% down payment on a $2 million mixed-use building represents $200,000 in equity. Investors should also budget for closing costs (typically 2% to 4% of the loan amount), legal fees, and lender-required reserves of 6 to 12 months of debt service payments.

Is it better to buy a stabilized mixed-use building or a value-add opportunity in NYC?

Both strategies have merit depending on your capital, experience, and risk tolerance. Stabilized mixed-use buildings with strong occupancy and long-term leases qualify for the best permanent financing terms, including lower rates, higher leverage, and non-recourse options. Value-add opportunities, such as buildings with below-market rents, vacant commercial space, or renovation potential, typically require bridge financing initially but can generate significantly higher returns once stabilized. First-time investors may find stabilized properties easier to finance, while experienced operators can extract more value from repositioning plays.

Take the next step toward your NYC mixed-use investment. Contact Clear House Lending today for a free consultation and rate quote tailored to your property and goals.