FHA loans, which are backed by the Federal Housing Administration, are designed primarily to help individuals purchase residential properties, not commercial ones. They are meant to make homeownership more accessible to those with lower credit scores and less cash for down payments. The typical use for an FHA loan is to buy a primary residence, which is a property where the owner intends to live most of the year.
However, there is some flexibility in the FHA program that can accommodate the purchase of mixed-use properties, where the property is both residential and commercial. To qualify for an FHA loan for a mixed-use property, the residential portion of the property must be at least 51% of the total building square footage, and the owner must live in one of the residential units.
For purely commercial property investments—such as office buildings, retail spaces, or warehouses—an FHA loan would not be the right fit. Individuals or businesses looking to finance commercial properties typically need to explore other options like commercial loans from banks, investments from real estate investment trusts (REITs), or Small Business Administration (SBA) loans, which sometimes offer programs for commercial real estate purchases, especially for owner-occupied properties.