Definition
Single-family use residential mortgages; multi-family (2-4 units owner-occupied) may use residential; 5+ units requires commercial financing.
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Single-family properties use residential mortgages (better rates); multi-family uses commercial lending. Multi-family (2-4 units) can use residential mortgages if owner-occupied 1 unit. Multi-family offers economics of scale; single-family offers simplicity.
Pro Tip
2-4 unit multi-family can often use residential financing if owner-occupies one unit.
Example
Duplex qualifies as residential (2 units, owner-occupied); apartment complex requires commercial financing