This may require providing extra documentation such as 12 months reserves, 12 months of mortgage payments for both the rental property and primary address.

(And best case it was a rental for 17 years then a primary for 3, making only 15% possibly eligible.)Personally, if you and he are both 100% sure of the facts I would first reach out to a qualified intermediary (a person who handles 1031’s).

The main difference right now that you would see between a primary and an investment property is the fees. 

If it's a primary residence the total loans of $400k (1st + 2nd) equals 80% CLTV (combined loan to value) of the purchase price.

If I am getting a primary residence mortgage loan for 3.5% down,  Is the lender allowed to know that I plan to rent the other rooms?

The question is does it make sense for a business owner whose business is their primary source of income to buy an investment property inside their business as opposed to just buying it in their name or an LLC. 

Even with a personal guaranty, you have to go after them judicially and it's not worth it if the borrower has very little to their net worth outside their primary residence which many states have homestead protections against.

I was made aware by a a Wyoming legal group that forming the primary LLC in Wyoming (for my property in GA) would be of no legal benefit and they advised that I only set up the LLC in the state of the property.

The Programs includes or covers:- Up to $2.5B in second loan purchases- A maximum programs duration of 18 months- A maximum loan amount of $78,277- A minimum seasoning requirement on the first mortgage of 24 months- Only for Primary ResidencesThe effect of a guaranteed government backed second mortgage for homeowners would be significant and likely put eligible second mortgage terms in line with below market FHA and guaranteed first position mortgage rates. 

Purchase price: $800,000 Cash invested: $80,000 Primary residence with an ADU What made you interested in investing in this type of deal?