Mortgage for Unconventional Home

Sounds like you would need a rehab loan from a local bank in that area. They would have more interest in you converting that property over then a traditional lender. Another route would be going with hard money to aquire the property based on future value. Last option would be to ask the seller if he would would do seller financing and take out a second with a local bank for the rehab.

Hi Kevin. Based on the fact that you want to convert the building to a 4-unit residential dwelling and you need money to renovate the property to make legal-conforming as a 4-unit, an FHA insured 203(k) renovation loan is the best option. Be advised that when you make the offer to purchase that your purchase agreement has to special verbiage in reference to the 203(k) renovation loan. The contingency within the purchase agreement would state subject to building being rezoned as a residential 1-4 unit dwelling. By the way, you could buy the building with only 3.5% of the improved value and keep your money in your account as reserves.

I agree, ;you will need a rehab loan or a FHA 203(k) multi unit rehab loan. A local bank will be the easiest to work with. I would avoid the mega banks and see if you can find a local bank run by local people.