Just drawing attention to something I got bit by recently:Home Possible mortgages used to permit 95% LTV on a super conforming mortgage for a personal residence, up to 4 units. 

@Nancy B.The DMSH is less an expensing election and more a book conformity election.There's a concept involved in the DMSH and other areas of the capital expenditure code section and regs called "units of property".You don't examine each line item on a receipt, you examine "units of property".Buildings are called out under the units of property regs as having special treatment. 

If it is to someone who is buying the property to eventually live on, there may be financing regulations you need to conform to for consumer financing. 

They are a little more lax, as they don't conform to Fannie and Freddie guidelines.

Do you have an example of something that doesn’t conform to the IRS standards? 

Would they view this property as pre-existing non-conforming?

Bank financing a rehab project via conforming mortgage is VERY TIME CONSUMING AND FRUSTRATING.

Restricting the data to this property profile and area matched the majority of our investor's properties at that time, which are A or B class properties.We started by exporting data from the MLS for conforming properties that sold or leased between 2008 and 2014.

Each conforming, conventional loan (those are the Fannie Mae/Freddie Mac loans if you recognize those names) has a clause that essentially states the lender "may" call the note due if you change title. 

I would be concerned about liability of listing something as a bedroom that does not conform to code.