I know that for CoC the bank financing option is the better route but I'm wondering if there are other factors I should be considering when deciding which way to go.What would you do in this situation and why?

You are going to want to talk to several professionals in your state for this one as it is a legal maneuver that amateurs or even professionals not familiar with the details of your situation on the internet probably aren't going to be able to help with much.

I am a first-time home buyer in a complicated situation.

People can only answer based on their experiences which may be totally different from the actual situation you're in, even if the surface questions (should I get a 7/1 ARM?)

Which reminded me of AJ’s situation 

The situation itself is a police issue, not a landlord issue. 

@Brian Murray a lender would be best equipped to handle this question, but for most secondary loans (Fannie/Freddie) that I've seen you'll need to go FHA to take advantage of lower downpayments with an owner occupant situation. 5% down conventional is typically single family residences.

So I ran into a situation.

Tough situation

I’m positive there are people here who know much more about the entire situation than I do, I just want to get a discussion started to see what you guys are thinking.