Can I finance a mixed-use building with an empty storefront?

Yes, typically with a bridge loan at 65 to 75 percent of value, since permanent lenders will not count vacant commercial income.

How is the vacant space handled in underwriting?

As zero income. The bridge lender relies on the residential income plus an interest reserve to cover the gap during lease-up.

When can I refinance into a permanent loan after leasing the space?

Often after 3 to 6 months of paid rent, though some lenders will use the signed lease sooner at a discount.

Do I need a leasing plan to get the bridge loan?

Yes. Lenders want a broker engaged, a marketing timeline, and a realistic rent target for the space.

Can I get a loan on just the residential units and ignore the vacant commercial space?

Sometimes, if the commercial space is a small share of value or can be legally separated. Ask the lender before assuming this works.

Can I finance a mixed-use building with a vacant storefront?

By Mark ColwellUpdated September 2026

Yes, but a vacant commercial unit generally requires a bridge loan rather than a permanent DSCR or bank loan, typically at 65 to 75 percent of value with the commercial space underwritten as zero income until leased. Once the space is leased and stabilized, you refinance into a permanent DSCR or commercial loan that counts the new lease.

Why vacancy changes the loan

Permanent lenders, whether DSCR or commercial, size the loan on income in place. A vacant commercial unit contributes nothing to that calculation, so the file often fails the coverage test even though the residential units are fully rented. A bridge lender will finance the gap, sized against current income plus an interest reserve, with the exit being a lease that unlocks permanent financing.

Typical bridge terms for this scenario

Item	Typical range
Leverage	65 to 75 percent of as-is value
Rate	9 to 12 percent, interest only
Term	12 to 24 months
Interest reserve	Sized to cover the gap while marketing the space
Exit	Lease signed, refinance into DSCR mixed-use or commercial loan

Ranges vary by lender.

What the bridge lender wants to see

Residential units occupied and producing income.
A market analysis showing commercial rents achievable in that location.
A leasing plan: broker engaged, marketing timeline, target tenant type.
Your reserves to cover taxes, insurance, and any shortfall beyond the interest reserve.
The commercial space in leasable condition, or a tenant improvement budget if not.

Getting to the permanent loan

Once a lease is signed, most lenders want it in place for 3 to 6 months of actual paid rent before counting it fully, though some will use the lease itself with a seasoning discount. The permanent refinance then reprices the whole building, residential and commercial together, at the standard mixed-use DSCR or commercial terms.

Alternative: exclude the vacant unit

Some lenders will finance the residential portion alone if the commercial unit can be legally separated or is a small share of the building's value, essentially ignoring the vacant space in the underwriting and leaving you to lease it up on your own timeline without pressure from a bridge loan's term.

A worked example

Four apartments fully rented at $2,400 a month combined, plus a vacant 900 square foot retail space. A bridge lender values the building at $650,000 as-is and lends $455,000 at 70 percent, interest only at 10 percent, with a 12-month interest reserve covering the full payment. Once the retail space leases at $1,400 a month after 5 months, the file refinances into a DSCR mixed-use loan sized on the full $3,800 in combined rent.

How CommFi handles it

Our lending desk prices the bridge loan and the eventual permanent refinance together so the plan is realistic before you close. It funds direct when it fits, and when a bridge lender comfortable with vacant commercial space in your market is the better fit, the desk searches a database of 7,000+ lenders and the ones that fit compete for the file. Zero upfront fees.