The only way to bypass this requirement legally is to refinance into a conventional mortgage.

Why would you be going hard money and not conventionally financed?

$19,000 down and (construction) conventional loan How did you add value to the deal?

If you’re looking for a cash out refinance utilizing a conventional type of loan then you can certainly pay off personal debt.

The resources we had:- a bank (conventional) that lends money up to 35k for 650 credit score- hard money lender with APR 120%- seller/community (who acts like he doesn't want to talk at all)- a real estate mentor that costs $35K to useThe "answer" to this exercise was:Use personal credit to borrow from the bank and spend the $35k on mentor, and then mentor has the "connection" with the community bank to negotiate a deal and brought a 70K property for 40K with FMV of $140K.

You can acquire your a primary residence from up to 1-4 units for as low as 5% with conventional or 3.5% FHA with a few exceptions.

Most every lender on this board can do both conventional, non-qm AND DSCR. 

Conventional loan How did you add value to the deal?

@Robert WestenbergerIf I were in your shoes, I would focus on multi-family homes, single-family homes with ADUs, or live-in flips, and explore financing options like FHA loans, conventional loans, or first-time buyer programs.

Conventional renting out never makes sense here in terms of cash flow.