Property Classes are used to rate the perceived quality of the real estate in terms of risk and liquidity.

Property Classes


Class 1 has the highest perceived liquidity/quality and includes multifamily and mixed use (with residential over commercial). Another key philosophy in our valuation of real estate is that we generally will value only the real estate. Items such as furniture, fixtures and equipment (FFE), going concern value, etc., are not generally counted.

Class I includes multifamily and mixed use properties. Mixed-use properties consist of a commercial use, usually on the first floor, and a residential use above.

To be eligible for Class I, mixed-use properties must meet the following standards:

  • Approximately 50% of the building, by either size or rental income, should be residential.
  • The percentage of square footage allowed for commercial use is as follows:
    • Approximately one-half for commercial use in a one or 2-story building or two-building property;
    • Approximately one-third for commercial use in a 3-story building;
  • Commercial use is generally confined to the ground floor;
  • Commercial use must not affect the health, safety or comfort of residential occupants.
  • Acceptable commercial uses are general office and retail. Other mixed use properties with commercial uses such as industrial, automotive, adult entertainment, bars, schools, public assistance offices or drug treatment clinics will be classified as Class 2 properties.

Class II includes office, retail, warehouse, mobile home parks (with a recreational vehicle component of 25% or less), certain mixed use properties, auto-service and self-storage.

In the case of mobile home parks, special rules apply. For “park-owned” mobile home units – as distinguished from the pads – the value, as determined in the “disposition value,” shall not exceed $2,000 per (unit). At a minimum, mobile home units must be separately and distinguishably taxed by the local taxing authority to be considered in the determination of market value.

Collateral we do not lend against include: land, personal property, equipment; churches, where the sole or predominant use of the property is only as a church, gas stations, leasehold estates, night clubs, health care, funeral homes, campgrounds, educational (schools, etc.), car wash, auto-dealerships, RV park, marinas with lake access only, golf courses, and any property where the business is regulated by the Perishable Agricultural Commodities Act (PACA).


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