First Time Home Buyer looking at a complicated scenario...

[Chad Day]

Hey everyone!

I am looking at buying my first "home".  I put that in quotes because the property I am looking at is zoned as a commercial building with a gutted upstairs apartment.

I'd like to purchase the property with a renovation loan, something like FHA 203k or Fannie Mae Homestyle. But will this type of loan work on this property?

I would make this my primary residence for however long the loan requires. I have read that FHA allows you to take out a loan as long as the commercial portion of the building is less than 49% of the square footage. This building should fall under that, but since the upstairs apartment is gutted, would this property still qualify? There is no running water, the plumbing would need to be redone. I would not add much, a simple bedroom, bathroom, kitchen, and hvac.

Another aspect of this deal is that the building is listed as a historic building and thus could qualify for some grants.  There is a Wisconsin grant for historic home owners that gives you back 25% of some renovations costs.  This could save thousands, but might add so much red tape that it may not be worth.  Does anyone here have experience with this?

Thanks for any help!