Why Do We Categorize Apartment Building Loans As Residential Financing?
The simple answer is that Apartment Buildings are Residential, from the tenants' perspective.
People live there.
The long answer:
Obviously, according to most conventional wisdom, an Apartment Building is technically a Commercial Property.
There is no such thing as an Owner Occupied Apartment Building (typically). Apartment buildings are a type of real estate built for Commercial (business) purposes.
Apartment Building Investors are buying these properties for income & profit, therefore from the Owner's perspective, of course Apartment Buildings are Commercial Properties, and therefore Apartment Building Loans are a type of Commercial Real Estate Financing. This is definitely correct, and indeed many of our bank & credit union underwriters fund apartment building loans from their Commercial departments.
The reason we at Glassridge typically categorize our Apartment Building Financing options as residential is simple:
We already offer so many other types of commercial real estate loans!
With over 27 types of commercial properties we can finance, from Office to Retail to Industrial (and more), it's important these products stand out.
Our Apartment Building Financing & Fix and Flip Loans are some of our most competitive & potentially profitable loan products for qualified Borrowers, and we didn't want them to get lost in the crowd.
Hence, since apartment buildings are definitely residential from their tenants' perspective (whereas office buildings and grocery stores are definitely not), we generally take the liberty to categorize Apartment Building Loans as a type of Residential Real Estate Financing.
If you prefer to refer to them as Commercial Loans, that's totally ok with us, and we do ourselves sometimes too.
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