Residential mortgage for HMO investment?

[bassbug]

We are looking into the potential of purchasing a property to run as a shared housing project for up to 4 disabled residence, one of whom would be a family member.

We have been advised by a mortgage broker that technically, we should get a commercial mortgage/loan. Apparently a 'Buy to Let' mortgage would also be unsuitable according to the broker. Having looked into the costs associated with securing a Commercial/Buy to Let' mortgage/loan instead of a standard 'residential mortgage', and have found standard residential mortgages to be far cheaper.

We understand that the government and our local authority does not consider properties housing less than 5 individuals to require an HMO licence.

Could anyone advise us on what practical/legal problems, we would encounter securing a standard residential mortgage for purchasing a property for this project, and if there are any 'work arounds'.

Thanks.

[Tassotti]

There are BTL products that will lend on an HMO. Speak to a different broker.

Although the property will not be subject to mandatory licensing, it will still be an HMO and all health and safety proceedures will need to be adhered to.

[lee2309]

Hi,

It will still be classed as an HMO. Regulation on HMO's has tightened up so make sure you find out everything you need to wih regards to the condition of the property especially if you are catering for special needs.

There are certainly companies offering mortgages for HMO's and my suggestion is that you apply for a mortgage on this basis and not residential.

I have some details of mortgage companies that offer HMO's and you can get cashback of the fee they earn.

Lee2309