Even though the property would be occupied by your kids, since you are going to charge market rent going forward, your loss is not limited to income because of the vacation home rule as you were limited before.  

anyone over the age of 18 must fill out a.n application no matter what!

Im prepared for alternatives should the personal loan prevent me from refi due to credit limitation.  

That is, there is no limit to the amount of interest a CA real estate broker can charge for a real estate loan they originate.

The market will not be 100% as hot as before with big & expensive homes, because interest rates are rising, property/local/state taxes are limited to a $10k deduction AND those homes are just pricey - so people cannot afford the $4500 payments as easily as they could afford the $3700 payments before (P&I, and T&I).

But your question can only be answered  with the limited information you gave . 

You could also have all documents handy and turn them in with your application, including W2's, tax returns, and recommendation from current landlord.

Seeing how the applicant treats their current rental and their personal property can tell you how they'll treat your unit!

They are limited to 10% of their investable funds.

A cash out refi will be limited at a 70% LTV too.