Potential of creating a non conforming, unmarketable loan.

This could vastly affect the value of your appraisal as opposed to being a true fourplex which is 4 units sitting on a conforming lot zoned for 4 units with one tax APN#.

This little 12x36 432sf thing MH is legal non conforming and should it be entirely removed and replaced by a new one it would have to then be code compliant and installed according to the current set back requirements which would require that we reduce the size to a 12 x34 which most MH factories won't provide as a HUD home.

You could work a deal and take a speed boat or airplane or equipment as collateral for a loan, just not the borrower's residence or other covered property.The two biggest issues are the ability to pay requirements and the RMLO seal on the note.ABTP must be done properly, even if you do a deal that isn't covered, you still have predatory lending and dealing issues and if you don't conform there on any transaction you can still be nailed, may be not under DF, but nailed just the same.The RMLO seal must be affixed to any covered note/agreement to be valid.

If so it shouldn't be difficult to get a use permit for an existing non-conforming building.

Can you confirm that your lease conforms to TX state law.  

I believe that's what you need to get a conforming loan.

As soon as a landlord convinces himself he can not or chooses not to risk a vacancy over getting tenants to conform to his rules he is already guaranteed to be on the losing end.If a landlord needs their tenants more that wants them the tenants own him. 

Note, if they are currently breaking one of the terms they likely won't admit to it, but they will be on alert now and will probably attempt to conform without you needing to serve them a legal notice.

But you still have to conform to local zoning regulations.