A bank will not give you the $ as you have to show ability to repay the loan. 

The loan is with you, not with your tenant, so none of that means anything to them - in fact because you live in one unit and it's under 4, if you were self-managing you don't even have to abide by fair housing laws (at least on the federal level). 

So it's a loan....You just detailed a loan. 

@Kayla Elliott  Hi Kayla - this was a commercial mortgage loan with a local bank, that held it "in house" after it was issued. 

The lenders that offer the 203k renovation loan are telling me that DPA cannot be used with it and this is in Ohio.

My mother-in-law is saying that my wife needs to sign off on the loan.

Doing an unsecured loan is a horrible idea. 

When you go to sell, you're subject to tax on the amount of profit between your adjusted basis and sale price, not your purchase vs sale price.Recapture is not repaying the depreciation.

Is it smart to take out a 40 year loan to get some cash flow?  

Hi John,No cap on the amount of DSCR loans you can get.