SFR and Duplex deeded together. Financing options?

[James Costa]

Hey! im new here, i apologize if this isn't the right spot for this.

My wife and I plan to start a family and are looking for a bigger house in a smaller neighboring town.

We came across an house that we love but it turns out in order to buy the house, we need to purchase the dupex (separate address)next door as they are deeded together. The house and the duplex are fully rented out and leased out until next year. Hopefully, we could work out a deal where the house would be vacant so we could move in soon after closing. I spoke with the city and the lot is too small to split the duplex off. We like the house enough to want to try and move forward, if we could even get approved. We through our lender a curve ball with this house. We initially were thinking to go FHA as we recently refinanced our ranch (which we plan to rent out) out of FHA, into a conforming loan. Im hoping I could get some advice on the best places to look for financing.

The SFR we would want to make our primary residence as soon as the current tenants are out, but because the duplex is tied to the house, my current lender told me it would probably be a 20% down commercial 5 year ARM loan and hasn't been helpful since.

Where should i be looking for financing? On-Line banks or smaller banks? Any directions you all could point me in? I know different banks do different things. I'm wondering if a smaller bank in that town would have better loans options since the house may have some history? Would they be more flexible in lending if we plan to move into the house as soon as the current tenants are out? Were still not sure if that is an option yet.