Additionally, do you have any other ideas or strategies that might help achieve his goals without incurring a tax liability?

I rented out the additional bedrooms to friends and family, charging them well below market, and sold when it was time for my wife and I to start our own adventures.

The loan will be on the additional collateral you created.

Let me know if I can provide any additional tips or resources to help.Best regards,Sadler Surratt 

In most single family zoned areas adding a single ADU is not a value add meaning it will not add more value than the hands off cost of the addition.  

In addition, suncoast will charge you a 1 month rent just to get the property filled, so you are already starting off massively underwater.

I would appreciate any insights and additional things I may be missing.

Keep existing and add an additional -~2000 sq feet 3.

This is straight from the CFPB website: "Additionally, for 60 days from the date your loan servicing transfers, your new servicer cannot charge you a late fee or treat the payment as late if you sent it to your previous servicer on time or within the applicable grace period."

However, i'll likely be looking at additional ways down the road to be even more secure for a backup what if scenario.