It is expensive for banks to foreclose and potentially have to sell the house - they would almost certainly lose money.   

I used State Farm Bank and it was a long process as well. 

Go to a bank, apply for a FHA mortgage, and then find a great realtor to show you around and look at some multi family homes. $200,000 multi family is easy to get into with $10k cash.

You may remember the lawsuit against the big banks years ago? 

So I’m about to get anywhere from 125K-145K HELOC (small bank).

The only problem is the house is zoned as a single family and they have added 2 units behind the house without zoning to multi family so several banks are unwilling to finance.What options do I have here?

I am able to get a conventional loan once the down payment is covered by the banks.

I work at a large national bank here in Minnesota and have been working with my regular mortgage guy there. 

Is there a Bank or CU that can help me?

The loan officer from the bank said he needs to know when FedLoan will report the payment before being able to provide me an amount.