Advice on a Very Individual Situation

[Jerry Harmen]

I have a complicated situation i'm hoping to explain as best as possible and am seeking advice as to what type of mortgage I should be looking for.

My girlfriend and I are looking to buy her grandmothers house. The grandmother still owes roughly 100 thousand on the house, and her power of attorney is willing to let it go to us for the price of the outstanding balance. The house needs a lot of repairs done. I am lucky enough to have a very trusted certified contractor who's very respected, in my family, and we had him do an estimate for repairs which totaled roughly 65 thousand. The house is worth much more then the 170 thousand total we would have to spend on it.  All of this leads me to my question. If the loan is through a specific company, can we go straight to them and arrange a mortgage that would include the remaining balance, plus the cost of repairs under one contract while also selling the house to us?

I was told that if we got a basic pre-approval for 200+ thousand, then this could be arranged with most mortgage companies. I have also done some other research and have read about Fannie Mae home-style loan which basically encompasses what I have been saying and combines the cost of a "fix-er-upper" and the cost of said repairs, and wondered if this is common. A little background also, this would be both of our first homes, we are not married but plan on it sometime next year or so, both have good credit, and moderate salaries, and this would be our primary residence. 

Thank you anyone in advance for any advice! I know this is a complicated situation.