Selling a Legally Nonconforming Structure - Help

[Shane Welch]

Background:

In February 2020, I bought a 1930s single family home that was converted to a duplex.  This duplex was converted before zoning laws took effect in the area, and was grandfathered as a legally non conforming structure, listed as a duplex.  However, the zoning for the area is Single Family only.  From what I learned, this means it cannot be rebuilt as a duplex if the structure is destroyed such as in a fire, it would need to be rebuilt as a single family.  

This is in the Hampton Roads, Virginia Area,  specifically Norfolk.

Issue:

I am now trying to sell this property and have been in contract for the last month, 6 days until closing, and the buyer's underwriter is now red flagging this zoning issue and I fear the loan may no longer go through, and this may present an issue selling to anyone using a VA/FHA/Conventional Loan.

I have been in contact with the city zoning through email, but they are quite unhelpful in trying to find a workaround.  I have found a couple "Special Exemptions" where the city have granted permission to rebuild the nonconforming structure again, and the counsel votes were all for accepting the exemptions.  

Question:

Will this actually halt any banks from giving a buyer a loan for my property?  What are my options?