Specialist HMO Finance Tailored to Your Property Goals
Are you seeking to secure a new HMO mortgage or refinance an existing HMO? We know how important it is to get the best deal. Whether you’re buying your first property or adding to a growing portfolio, we’re here to help make the process straightforward.
HMO financing can be hard to understand, but it doesn’t have to be a stressful process if you get the right help. As a whole-of-market Broker, we work with ALL HMO Mortgage lenders and we’ll look for the best lender and terms that really meet your specific needs after we learn about your goals. No slick sales pitch, just clear, straightforward advice from market experts who really want to help you get it right and maximise the ROI on your HMO portfolio.
Commercial HMO Mortgages Available For:
- All new-build HMO projects
- Refurbishment or redevelopment of existing commercial HMO units
- HMO remortgages of existing HMO units
- HMO financing available for licensed as well as non-licensed HMOs
- Please read on to find various types of build-to-let and buy-to-let commercial properties that qualify for our HMO financing packages.
A ‘House in Multiple Occupation’ (HMO) is a widely used commercial letting option that is increasing popular with property developers, property owners and tenants alike. As recent upheavals in the UK economy, along with reduced housing benefits, start impacting at the ground level, experts believe that HMOs will only continue to rise over the coming years.
Therefore, it’s naturally understandable that both landlords and property investors are interested in maximising the potential from this market sector, whilst equally playing their part in offering good quality and affordable housing to tenants. An HMO finance package is much-needed to help your new HMO development project materialise or to refinance your HMO project with a more affordable deal once refurbishment / conversion works have been completed.
An HMO mortgage is essential to help your new HMO development project materialise, or to refinance your HMO project with a more affordable source of long-term finance once all refurbishment / conversion works have been completed.
Key Features of Our HMO Mortgage Services
- Borrow up to 75% LTV commercial value or 85% bricks and mortar value
- Access to Whole of Market Lenders – i.e. ALL HMO Lenders
- HMO mortgage broker that covers the widest range of HMO projects and has specialist knowledge and experience of the sector
- HMO mortgages available from as low as £50,000
- All applications are assessed and acted upon within 24 hours
- Secure funding from specialist HMO mortgage lenders across the UK
- Most affordable and flexible interest rates
- HMO mortgage terms best-suited for your repayment terms
- No hidden charges
- No-obligation quotes available free of charge
- Over a decade’s worth of experience to help you find the best deal
What is an HMO?
A property is considered to be a House in Multiple Occupancy (HMO) if:
“Three or more unrelated persons occupy the property with self-contained rooms and shared communal facilities (such as bathrooms, kitchen etc.)”
At Commercial Finance Network, we operate nationally throughout the UK and cover all sizes and types of HMO properties as far as HMO financing is concerned. Some typical examples include:
- A shared house with one or more ASTs
- Houses converted into self-contained bedsits
- Student halls or student house-shares
- Lodging houses
- Houses converted into B&Bs
- Shared flats
- Purpose built blocks with multiple self-contained units
With continued changes to HMO legislation and the ongoing tightening of the HMO licensing specifications both nationally and by local authorities, Landlords are finding that more and more HMOs are now requiring a license in which to operate legally.
We work with ALL the specialist HMO Lenders who offer finance to both licensed and unlicensed HMOs so long as the appropriate local amenity standards are adhered to and the premises are naturally operating lawfully.
Mandatory HMO Licensing
With new regulations now in place since 1st October 2018, an HMO now requires a mandatory licence only if more than 5 unrelated persons occupy the property.
The new changes now mean that ALL HMOs requiring a license if they have 5 or more unrelated persons occupying the property, regardless of how many storeys the property contains.
Why Use HMO Finance?
Private HMO finance is a popular option with HMO owners as getting a bank or a mainstream lender with ultra-conservative lending parameters to offer an HMO mortgage is rather difficult, since it is a very specialist product and one rarely understood by most mainstream lenders.
HMO finance packages are typically used to develop commercial build-to-let HMO units from the ground-up. They are also used to refurbish existing HMO units in order to install the necessary fire protection systems or possibly add extra rooms etc. Additionally, a common reason for seeking specialist HMO Finance is to refinance some existing short-term sources of finance to provide a longer term source of finance &/or to save on high rates of interest.
Whatever your particular requirements may be, you can count on us to find the best HMO lender for you so that your investment in an HMO project realises excellent returns for you.
HMO Finance – FAQs
What is HMO finance?
HMO finance is a type of mortgage designed for properties rented out to multiple tenants – usually three or more – who live independently but share facilities like the kitchen or bathroom. These are often student houses or shared rentals.
Can I still get an HMO mortgage If I've never been a landlord?
Yes, it is certainly possible, but just a little more difficult. First-time landlords may be accepted by certain lenders, but they will probably require a good plan, a sizable down payment, and occasionally additional guarantees to ensure that you are prepared to oversee a shared property.
Speak with a specialist HMO Mortgage Broker to discover all your best options and rates.
How is an HMO mortgage different from a regular buy-to-let mortgage?
An HMO mortgage is a specialist mortgage product for properties with multiple tenants under separate rental agreements. It often means more income potential, but also stricter rules and checks from lenders compared to standard buy-to-let mortgages. A buy-t0-let mortgage invariably applies to only “single let” properties – i.e. one rental agreement applies.
How much deposit do I need for an HMO?
You’ll usually need at least 25% of the property’s value as a deposit. In some cases, experienced landlords might be able to put less deposit down, but most lenders stick to that benchmark.
Can I remortgage my existing HMO?
Yes. Many landlords complete an HMO remortage every few years to secure a better rate, release some cash for other projects, or switch to another HMO lender who offers more flexible terms.
Do I need a licence before applying for HMO finance?
In most cases, yes. Lenders will often ask to see proof that the property is either already licensed or will be licensed by your local council – it’s part of their risk checks. Some lenders will accept evidence that an HMO license has been applied for.
Speak with a specialist HMO Mortgage Broker for guidance in terms of which lenders are best placed when no HMO License currently exists.
How do lenders work out rental income on an HMO?
HMO lenders will usually look at the total rent from all the individual rooms, not just one overall figure. This can actually work in your favour, as it often shows stronger rental income compared to a single tenancy.
What kinds of properties can I get HMO finance for?
You can get HMO finance for all sorts of shared homes – student lets, multi-tenant houses, or even converted buildings with separate rooms. As long as the setup meets HMO rules, it may qualify.
Is an HMO a good investment?
Yes, it certainly can be, especially if you’re aiming for higher monthly income. Renting by the room often brings in more money than a standard “single let”. But it’s not hands-off – you’ll need to manage more tenants, stay on top of local licensing rules, and deal with extra running costs. If you’re willing to put in the work (or use a good letting agent), an HMO can be a smart move.
What’s the difference between HMO Finance and an HMO Mortgage?
In most cases, the terms are used interchangeably – but there’s a slight difference in how they’re used. HMO mortgage usually refers specifically to a loan secured against an HMO property, while HMO finance is a broader term.
HMO finance can include mortgages, bridging loans, refurbishment finance, or any other funding used to purchase, improve, or refinance an HMO. So, while all HMO mortgages are a type of HMO finance, not all HMO finance is a mortgage.
Why Commercial Finance Network?
Commercial Finance Network was among the first specialist commercial finance brokers to realise the potential for growth of HMO housing. We are among the pioneers when it comes to designing HMO finance packages based on the potential of the project, so that borrowers can get the highest LTV in the market with low interest rates.
“Getting approved for an HMO mortgage becomes much easier when you have a seasoned HMO broker like Commercial Finance Network, the pioneer of HMO financing in the UK, working with and for you.”
Let’s take a look at what really makes our HMO finance packages the most suitable choice of HMO mortgages for you:
- We specialise in customising HMO finance packages based on your requirements.
- We work tirelessly to bring on board the best hmo mortgage lenders to finance your project, while also ensuring that the funds are released to you on an urgent basis.
- We’re a Whole of Market Broker, so able to offer an extensive range of HMO lenders.
- Efficient and prompt customer service is the cornerstone of our operations.
- When you deal with Commercial Finance Network, you deal with real people who maintain a face-to-face working relationship with you, as opposed to most HMO mortgage brokers out there who prefer to stay ‘faceless’.
HMO Financing Doesn’t Always Have to be a Compromise!
Just because mainstream lenders tend to stay away from financing HMOs, you don’t have to settle for a deal that simply doesn’t work for you. Let our HMO mortgage experts find the best HMO loan solution for you – Get in touch with us today to speak with one of specialist HMO Mortgage Experts.