House hacking is an excellent strategy, especially with the potential to use an FHA loan to secure a property with a low down payment. 

Over a year later it finally sold and they lost their BUTT!!! 

If it is with HUD, did they foreclose or is HUD servicing the loan? 

Finally, double-check local demand and rent trends in the area to ensure the pro forma income is achievable.I’ve worked on several mobile home park deals as a broker and am currently helping a few clients sell their parks, so I know how important it is to ensure the numbers make sense both now and in the long term.

The sale failed and he still owns it.One of the potential solutions is to use an SBA 504 loan for the real estate. 

Also, did you have any other loans (ie student loans, primary residence mortgage, etc) when you took on the $25k? 

Points and loan details are TBD still as we're just getting the tentative process down on paper as we wade into the details. 

If I were to approach a seller of a $200k home, and they had a remaining mortgage of $100k, could I get a new bank financed loan for that $100k, and have the seller finance the remaining $100k of equity to me?   

A foreclosure initiated by Ocwen won't touch your credit at all as you are in a second lien position and not a direct holder of the loan/mortgage.If the foreclosure starts you might be able to recoup the money or lose it.

Once the rehab was done I refinanced out of the private loan into a conventional loan as a primary residence.