Typically, a recent arms length sale of properties that were advertised for sale publicly is deemed to be persuasive evidence of the property's actual market value.

It sounds like there is enough of an arms length from you, who is not related by blood, to a mother of an in-law. 

I am pre-approved for an FHA loans but they require owner occupancy and expensive PMI that stays with you for the length of the loan. 

@Jeremy KarjaIRA money is not suitable to the plan you are discussing.While a self-directed IRA may be invested in real estate, everything must be done at arm's length and exclusively for the benefit of the IRA. 

The big one seems to be the tax write-off in paying more interest, so depending on the length of time you want to hold onto the property, there's probably an optional balance point.

The bigger unknown and possibly the most damaging is the length of time the house has been empty.

I have had this happen to me before (varying lengths of time stayed). 

Not an arms length transaction....you’re not going to want the penalties if you try it.

The IRS looks like if you provided services for your short term renters (breakfast, cleaning) ect....but also they're definitely looking at length of stay. 

I don't think its the length of time I've been at my job that the banks are concerned with..