Firstly, conventional loans now allow for ADU income to be counted as borrower income for financing.

Looking at around 500K for purchase and rehab but the income potential is amazing!

Could you hustle and work some overtime or get a side hustle to earn more income to get the full 20%?

No not nessesarily but I think that this is a major income cut if people stop falling for it.

Are there any banks who don't care much about the chapter 13 if we can show the equity, our incomes, our cash, our credit scores are good, and our payment history are all good? 

I would suggest that you rent the property and consider using a property manager who can finance the improvements for you up front and be repaid out of the rent so you can have passive rental income over the long run. 

What are your expenses compared to income?

Don't pay your income taxes, your house or other assets can be seized. 

Ive apply on two different accounts and sent customer service emails and no response. 

On the other hand, STRs present higher income potential, flexibility in pricing, and potential tax advantages, but require active management, adherence to regulations, and may entail unpredictable income.