“relevant law defines any property that holds five or more families as a commercial property, a classification that is typically subject to more stringent loan terms.”
A buddy who owns several multifamily houses has stated that this is fraud. Any house over four apartments is considered a commercial property. Therefore, you have to have a larger percentage down payment when you take out the loan.
This is why many investors try to specifically buy multifamily houses with 3 or 4 apartments. The most you can have without it being a COMMERCIAL loan. Commercial loans do not get the same interest rates as 3-4 unit home.
So, basically she LIED ALLEGEDLY.
I'll bet insurance is higher as well if deemed "commercial", allegedly..