Trouble refi out of hard money loan

[Carlos Handler]

Hi everyone! I purchased a home with a hard money loan. I'm trying to refinance to conventional loan. The property is a single family residence 5 bedroom, 3 bath. The previous owner split the 2 story home into two units. Upstairs 2 bedroom/1 bathroom & downstairs 3 bedroom/2 bathroom. The appraiser I had said the upstairs is an ADU but isn't permitted. What ideas do you guys have? Is there lenders out there that will refinance? Thank you!

[Amaury Zambrano]

Remember that ADU is less valuable than adding sq ft to an existing floor plan for an appraiser. Have you run comps on homes with the same sq ft as you?