Even if this affordable housing initiative works perfectly the effects won't be felt for a number of years.

The refi will require the same qualifications as an initial mortgage.

The Numbers Initially, the ARV for this project was $360,000, with a rehab budget of $122,000 and a timeline of 9 months.

I would go one step further and point out that the food they eat leads to most of their medical problems.

That being said, as to your initial question, what is the collateral for the loan?

But if you are just offering advice (and from what you laid out, very sound advice), then the most prudent thing would likely be to step back and let them come to the realization that you are correct on their own terms.

Does anyone have advice on next steps on how I can proceed with my situation?

So I suspect you will only get a few applications of which maybe 50% are qualified and that your list price is not as off as the initial interest may make it appear. 

You’re right about the taxes, because the taxes I paid initially on the withdrawal was not enough so I got flagged later on; a lesson learned. 

For the sellers-no fees.The w/s partner-helped him with initial offer, which added the value of a significant profit for both of us.