Shorter term is much more work, but more money also.YOU have to decide what is best for you, your working life and family situation.

It should have been a plumber/electrician.We hired a speciality contractor to do the rest.Did anyone go through a similar situation?

First, never send a lender money unless it's to be paid for appraisal or admin charges and if you looking for a good lender I could refer you to our hedge fund which offers you a hard money loan with no experience and only must be a homeowner.

Cameron,If you are looking for a Primary Home loan its easy you can use a DPA program. 

Would this be considered mortgage fraud since I used my job and W2 income to qualify for the loan?

I just helped a investor with two DSCR loans in this area.

I never want to be the first to do anything. garbage deal let it go. you are talking about council variance, constructing or renovating a structure, you won't be able to get a permit. not advice but not to by the deal and not to look at the adu as anything but garbage anyone who says any differently should look at a zoning map and show me why and how an ADU makes any financial sense. you are only getting yourself into a very poor situation. tear it down and move on. 

Investment Info:Condo private money loan investment.

The loan insurance company seems legit.

Quote from @Matthew (Mateo) McDaniel: A hard money lender is typically used for short-term loans.