What Is Owner-Occupied Commercial Real Estate?
Owner-occupied commercial real estate (OOCRE) is a property where the business that owns the building also operates its primary business from that location. Think a dentist who owns the office building where the practice operates, a manufacturer who owns their warehouse, or a contractor who owns their shop and yard.
This distinction matters enormously in commercial lending. Owner-occupied properties qualify for a broader range of loan programs — including SBA financing with low down payments — that investment properties do not.
Why Own Your Commercial Property Instead of Leasing?
- Build equity instead of paying rent: Every mortgage payment builds ownership; rent payments build nothing
- Lock in your occupancy cost: A fixed-rate mortgage eliminates the risk of rent increases at renewal
- Tax advantages: Depreciation, mortgage interest deduction, and Section 179 deductions can significantly reduce your tax burden
- Control over your space: Renovate, expand, or modify without a landlord’s approval
- Retirement asset: The building can be sold or leased when you retire, creating ongoing income
- Tenant income: If your business doesn’t fill the whole building, lease the unused space to other tenants
Best Loan Programs for Owner-Occupied Commercial Real Estate in Texas
SBA 504 Loan
The gold standard for owner-occupied CRE. Buy your building with just 10% down, and lock in a long-term fixed rate on the SBA portion. Your business must occupy at least 51% of the space. Terms up to 25 years. Maximum loan size: $5.5M on the SBA debenture. This is the lowest-cost, highest-leverage program available for owner-occupied commercial properties.
SBA 7(a) Loan
More flexible than 504 — can be used for real estate plus equipment, working capital, or business acquisition in a single loan. Up to $5M, 25-year terms for real estate. Slightly higher rate than 504 but more versatile. Good when the deal includes more than just the building.
Conventional Owner-Occupied Commercial Mortgage
Bank portfolio loans for owner-occupied properties. Typically 20 to 25% down, 5 to 10-year terms, 20 to 25-year amortization. Faster to close than SBA (30 to 45 days vs. 60 to 90). Better for borrowers who want speed, have strong financials, and don’t need maximum leverage.
Stated Income Owner-Occupied Loan
For self-employed business owners who can’t document income through tax returns. The stated income program uses bank statements or asset depletion instead. Higher rate than full-doc, but gets deals done that conventional lenders can’t touch.
Property Types That Qualify
- Office buildings (professional, medical, dental)
- Industrial, warehouse, flex space
- Retail (single-tenant owner-user)
- Mixed-use (business occupies ground floor)
- Auto repair, car wash, body shops
- Restaurants and food service
- Churches and religious facilities
- Childcare and education facilities
- Medical and veterinary clinics
Owner-Occupied Loan Requirements
- Occupancy: Business must occupy 51%+ of the building (SBA) or 50%+ (most conventional)
- Time in business: 2+ years preferred; startups can qualify under SBA with a strong business plan
- Credit: 650+ personal FICO for most programs
- Cash flow: Business must demonstrate ability to service the debt — DSCR of 1.25x or better
- Down payment: 10% (SBA 504), 10–20% (SBA 7a), 20–25% (conventional)
Finance Your Business Property in Texas
Stop paying rent on someone else’s building. We’ve helped hundreds of Texas business owners make the transition from tenant to owner — with SBA, conventional, and bridge loan options to fit every situation. Submit your deal and we’ll have a recommendation within 24 hours.
Apply Now — Owner-Occupied Commercial Loan Pre-Qualification