Example: sold a 3 plex, but really it wasn't zoned MH (even though we had proof the city approved another living space to be built at the back of the property via non-conforming use). 

Assuming you are getting a conforming loan you will be violating the terms of the mortgage.

Also by that point I will be financing roughly 50% LTV.I usually advocate 15 year ammortization and seem to be a rare breed on this but it really made the transition to the next stage a lot easier as I was already conforming with guidelines, just added the balloon wrinkle with an interest rate adjustment at 5 years.Most businesses operate under these terms and even when private money is involved I try to keep them for a shorter term.

True but the issue from the lending end stems from being able to sell the paper and having 2 legal descriptions attached and 2 APN's at 2 separate physical addresses so it sounds like a lender who would do this would probably be a portfolio or community bank lender (as they're not going to sell most likely, or only to another local lender who would be cool holding super unique type of paper as this).If I wanted flexibility to sell the paper/note I would make sure it conforms to multiple lending guidelines so I can freely have multiple bidders for this note in the event I need to unload it or shore up my balance sheet and free up my lines.

The VA dictates this and in order to make the loan conform to VA standards lenders have to play by their rules.

Because of these efforts by the state, legalizing existing ADUs (typically these used to be "shadow income" from non-conforming units), and building brand new ones should be a lot easier.

Client had the land and needed help with city approval for a non-conforming lot new construction approval.

@Ethan DezzaniAny of the conforming loans (e.g. conventional, FHA, VA, etc.) will require owner occupation. 

Only possibility is if it’s a current non-conforming use property built before code was established/enforced with two habitable buildings on lot.

Lenders typically want properties owned by one person/entity. hope this helps Ok most of this makes sense expect for the fact that if the loan period is up and I have complete ownership of all properties meaning 100% equity why can't I sell one property out of the portfolio loanto clarifyonce I have 100% equity on all the properties inside the loan does the loan expire like a conforming loan and I am free to do what I please with the properties whether that be selling or doing 1031 exchanges