Most lenders, no.Best rate lenders in the universe:1 & 2) No, they assume fully drawn, fully amortized (if it's 10 years i/o, 20 years amortized, these "best in universe" will assume a 20 year term for qualification purposes), might even hit you with a "payment shock" factor if it's currently not drawn.An independent mortgage broker in your area will be able to show you both options, they have no reason to be biased towards one or the other, by law they get paid by the lender the same for bringing the business in the door no matter your rate.

The use of private lending and seller financing cannot be overstated in a situation where you don't clearly fit into the banking debt 'matrix' style of lending.Your situation is extremely common for new investors seeking financial independence. 

Sending you a PM; I charge below market rate on two independent properties, for two completely different reasons.     

For those of you, no matter what age frame you fall in:(lets assume we moderately change our strategies through the years to  account for changes in economic cycles)-How are you preparing yourself for financial Independence and possibly early retirement? 

Step 2 would be to take a little time to adopt some of the principals of the FI (Financial Independence) community.

I've come across Foremost and All Risks, along with the suggestion to source these or others through an Independent Agents' office. 

I’d just recommend using something other than you’d like to use the low downpayment mortgage assistance system to get yourself closer to Financial Independence as your key point.

Would these general renos further reduce the cap rate of this building independent of macro economic conditions and the local area?

Just make sure you really know what you're doing/getting into - you need to independently verify what they're telling you in terms of market rent, ARV, rehab costs, etc.

@Julie Fullmer You have two situations that are related but independent. 1) Your Mom and hubby are selling their primary home so they will get the $500k exclusion. 2) The buyer is offering a seller financed note.