That will determine if you could sell it and use the money to buy a single family home or would need to take out a mortgage. 

Our rating across all properties is 4.5 too. 

I’m approved for a mortgage and want to house hack but doesn’t feel like the opportunity is there at the moment, but I also know that’s a limiting belief.

They aren’t able to get a mortgage themselves so they would provide the money while the mortgage and deed would be in the others name.  

I am bullish on the FHA 203k and home-style renovation loans that allow you to leverage the cost of your renovation as part of your mortgage, which is just an insane deal, in my opinion.Do you have a specific area where you want to purchase?

However, i want to address placing a tenant.My market has a low vacancy rate.  

And your bank is not requiring any sort of paydown of the mortgage for a partial release. 

That is the best option if you are truly trying to help a family member.you cannot get control of the mortgage, you can do sub2 but you are not in control, the bank could call it due if they see the property transfers title.The other way is for you to buy it from them at market rate, then rent it back to them at market rate.

I can mark it up with a fee or by increasing the rate (or both, but I never do).

So this is creating more competition and more agreesive rent rates and/or concessions like 1 month free to get those vacancies filled.