I have some relatives that will never leave the safety net of a job  or even invest in RE due to the not thinking outside of the box (or cubicle).

If so, then find out what you have to do to have him removed as domestic violence allows the tenant to move without 30 days' notice (to ensure her safety). 

My concern is whether the city could deny permits for these modifications, such as removing walls or converting a garage, or if they are mainly just concerned with safety and habitability.

A 5 year arm might be a bad idea in this case. 

You have a gentlemen who served our country in the armed forces he does not deserve to be treated as you guys are doing .. 

I guess for me the dividing line is does it damage the function or cause a safety hazard if I leave it on the tenant.  

Financing provided through this program is only available for properties located in Michigan or Florida.Available Product Type: SOFR 7/6 ARM, SOFR 10/6 ARMLoan Amount: $766,550 MaximumLTV: Purchase and No Cash Out Refinance - Maximum 99%Prepayment Penalty: NoneLoan Assumption: NoneEligible Properties: 1-unit dwellings, attached and detached condominiums, PUDsEscrow: An escrow account must be established for property taxes, and flood insurance, if requiredUnderwritingNo Private Mortgage InsuranceOccupancy – Primary residencesMinimum Credit Score - 700DTI – Max 43% (UW/Mgmt exceptions up to 50% with minimum 3 documented compensating factors)Student Loans – If in deferment, no qualifying payment requiredDown payment of 1% must be borrower’s own funds, while closing costs and prepaids may be gift fundsAttached condominiums require a 10% down paymentEligible Borrowers – Protect and serve heroes are defined as employees of public or private education institutions, employees of medical and healthcare organizations, all first responders, and active or former military personnel.Servicing: Retained

I'm fine with the money down and shorter term but the higher rates and the ARM I am not a fan of in general.  

ARM (America's Rental Manager) has had all three of my Birmingham properties for about a year.

. - They are arms-length.