You can probably just go ahead and live in that 5th unit, but I believe whenever you go to refinance it with a bank or what not, the 5th unit will make it require a commercial loan and not residential regardless of what the county records show the property to be. 

Quote from @Gregory Banks: I would hire a structural engineer. $1,000 inspection could save you tens of thousands.

Credit unions, banks, mortgage companies and private lenders.They all had the same answer.

Short Sales, Bank Owned, $/sqft, school district, days on market, etc.  

When I read the bank would accept 91k I understood that to mean that was the 30 day payoff amount on the mortgage.  

Would this be better to try and go through a local bank or is there good options for private money or other banks that specialize in this?

If you can get a better deal on the home due to age its a fine and if you need financing banks do not judge year built. 

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Since the buyer is not able to get bank financing, you are charging a few % points higher.So your $289k house might sell for 320k at 9.9% for 30 years.

You are likely overpaying by $5,000.Broker fee of $3,000 and Processing Fees of $2,000 seem out of place...but then again, i never used a broker to get a loan so I am not sure about that.If the broker was able to get you an interest rate or loan product that you wouldn't be able to find on the open market...its high, but likely fair.if you are getting a loan product that you could have gotten by going to a normal bank...seems high and unnecessary.