There are advantages and disadvantages to it and those can vary by the local housing authority that administors the program in your area.

But each bank/loan program has their own requirements so you should also double check with whatever loan officer is submitting her application.

My tenant has used the housing assistance program this year.  

Government Programs and SubsidiesYou might qualify for programs that offer incentives, especially if you're investing in areas targeted for development or revitalization.

Wait until Harris introduces the 25k first time buyers assistance program. 

Local grants and first-time homebuyer programs can help minimize upfront costs.

It's possible that they are turning up the heat to the maximum because they are part of a utility-subsidized bill program.

If Planning does determine the existence of your ground floor unit, it will require you to legalize the unit through the existing Planning code process assuming zoning supports the third unit OR using the new ADU program making your fast track condo conversion a passing dream.With regards, to some of your latter comments and questions:1) Any un-permitted work (including corrections) is not a good idea as a quick compliant from a neighbor can bring an inspector knocking on your door with a NOV especially in the current environment where everyone is SIP.2) Legalizing existing constructed spaces can be hit and miss based on the inspector you get.

I believe though Douglas County is no longer "rural" enough for USDA programs.

A local lender has a first-time homebuyer program that offers 0% down with no PMI and $2k towards closing costs with a very competitive rate (6.025% as of 8/19/24).