@Michael FradettePrivate or hard money 2nd position loan.Also realize most lenders will not go above 75% cltv so you will need to have a significant amount of equity That is if you can even find a lender to do a 2nd

I originally purchased this house to be nearby my grandmother in her last few years but realized quickly that it was a prime area for short term rentals as there are no zoning rules or permits necessary etc.

I didn't realize that was a problem.

Where you clearly went wrong is you bought a home for $390k and after renovating it its worth $445k or best offer of $380k.Also realize you probably also signed a personal guarantee so any amounts owed they can come after you for, and if you have equity in your primary residence they could potentially foreclose on that (depending on what state it is).

I realize that my Fear of the Unknown is natural.

The Deed of Trust for the seller financing would be a "reconveyance without satisfaction" once I sold the property, as I would like to keep the loan and the seller would like to delay realizing the gains.

Also, I realized on the cook county assessor website my property valuation seem to be very undervalued.

Surely you realize that "the projects" denotes subsidized housing?

Essentially (broad brush strokes from a layman's understanding) what many people don't realize (and I didn't before 3ish years ago) is insurance companies have insurance against their own substantial losses; 'reinsurance'.

@Jarrod OchsenbeinYou are correct that if property has equity coverage you would get paid off in a foreclosureJust realize what is loan for, if it’s fix and flip the property may not be fully renovated which add riskIt comes down to underwriting the borrower.