Zoning issue with refinance

[Tolulope Adewole]

Hey folks. Hoping I can bounce ideas off of this group to figure out what to do with my situation. I purchased a home in August, GA in March 2021 that I rehabbed and was ready to refinance in November 2021. During the appraisal, I learned the property is technically a duplex because of the addition that was added on before I purchased it (not sure when it happened). Since the home is in a R1 (single family home) zone, I couldn't close with that lender unless I got an exception from the county or connected the units from the inside so the home would pass as a SFR but I already had renters in both units.

I was able to find a local lender that refinanced (no cashout) for me so I could get out of my HML but that loan will balloon in January 2025. I know I still have time but I am considering trying to get an exception from the county so that I can refinance with a longer term loan with no problem OR try and find another local bank that will overlook the zoning issue and refinance the home out of the current loan that I have before it balloons. I spoke with the county today and they said I can try for the exception but the person I spoke with said it could go either way for me. He wasn't confident I would get approval though. I may just try. I will just be out of $800 and time. If all else fails, I am going to try and sell the home.

If anyone knows of a lender that would lend with the zoning issue, please drop their info. Otherwise, any feedback on what to do would be appreciated.

[Greg M.]

Quote from @Tolulope Adewole:

nce the home is in a R1 (single family home) zone, I couldn't close with that lender unless I got an exception from the county or connected the units from the inside so the home would pass as a SFR but I already had renters in both units.

What about installing a hotel-style double door? Two doors, each with a deadbolt on one side. There is now an opening between the units. You keep the keys to both doors.