Advice sought on financing $40K property

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Hello Bigger Pockets!

This is my first post here, although I have done much reading and learning over the past several months.

I am getting ready to make an offer on my first investment property.  This is somewhat out of necessity, we have moved to a very rural area of South Carolina (Bamberg County) and would like to have property in the school zone where our daughters attend.

My question involves financing.  The property is listed at $39,900 (it is a foreclosure).  I did not know that the large banks typically don't bother with mortgages under $50,000.  

The local, small town bank, says they can help with this, but that a traditional mortgage would take over 90 days and the banker seems to be pushing me toward a Commercial Loan, with which I have no experience.

We have the cash for 20% down and the property probably needs $2-3K in work.  The city assessment for the house is $58,000.

So, does any one have experience with a commercial loan in a buy and hold situation?  Any expertise, experience, and opinions are welcomed.

Thanks in advance!
Mary