Combining Conventional and Owner Financing

[Juan S.]

How it going BP,

Is it possible to combine a conventional mortgage and seller financing at closing, will banks go for that?  Back story.

I found a deal on a single family home that has a garage apartment that could be rented out. I plan on living in the home as a primary resident and renting the garage apartment out to the current tenant that is paying 650 for rent currently. Eventually after 5 years or so I will rent both units out with the main unit bringing in 1800 currently in rent to total 2450. The home will appraise at 316k and is currently listed for 275k. After talking with the agent I found that the buyer is extremely motivated. 

I would like to put two offers in at the same time for the seller to choose one for $225k using FHA loan and another for $250k with $175k as bank loan and the seller caring $75k has a second mortgage with 60 installments of $625 zero percent and ballon of  $37,500 at the end of the 5 years. 

Will banks go for that? If so do you guys know any good lenders that would?

[Tom S.]

@Juan S. Yes, to clarify with a real life example, bought a place for $125k and the bank required me to have 25% down ($31.5k).  I took a 401k loan for the downpayment, and at closing, the seller gave me a $25k loan and secured it as a 2nd mortgage.  So I wasn't fully reimbursed, but got the deal down for only $6500 (plus closing costs) out of pocket.

I used the $25k I got back plus other cash to immediately pay back the 401k loan.  It only cost me $100 for the admin fee.