You'll need a contract made up between the two of you and a loan doc for the funds.

Since my grandpa's wife is passed already, he has full control of the property, but if he were to sell the house, he would have to pay his wife's family a percentage of the sale, but he doesn't want to do, he would rather take out some type of loan (what loan is best in this situation?)

This step must be done carefully to avoid further damage.Structural Repairs: Address any structural damage first, including the roof, walls, and foundation.Systems Repair: Repair or replace electrical, plumbing, and HVAC systems as needed.Interior Restoration: Once the structural and system repairs are complete, focus on restoring the interior, including insulation, drywall, flooring, and fixtures.Safety and Health Concerns:Air Quality: Ensure proper ventilation and air quality during and after the restoration process to remove smoke odors and contaminants.Mold Remediation: Check for and address any mold growth, which can be a common issue in fire-damaged properties due to water used in firefighting.Final Inspections:City Inspections: Coordinate with the city for final inspections to ensure that the property is safe and habitable.Fire Department Clearance: Obtain clearance from the Fire Department confirming that the property is safe to occupy.I hope this helps, best of luck!

i found this deal thru zillow and had my agent contact seller to finalized the deal.

I own a small real estate brokerage in CO and I'm also looking to start a mortgage company or at least having some staff members licensed as loan officers. 

I make about 60k yearly and I’ve spoken with chase and they told me I could get a 250k loan with 5% down at 7% interest.

Is there any chance of getting a residential loan on this?

You will need 20-25% down and a commercial loan for the rest.Most lenders will want to lend to an LLC with you personally guaranteeing the loan.Typically, each MFR would be purchased under its own LLC, for liability purposes.Each LLC would then also need its own bank accounts for collecting rents and paying expenses.

The loan amount is $220000, and the estimated Zillow price for the home is $600k.

You can also structure the loan to give you a little extra cash flow in the first couple of years.