If free and clear should also consider a DSCR loan 30 year fixed no income no doc 

or should I ask for a 600k loan and lay out my plan to my mortgage  broker?

Sounds like you are referring to a non-recourse loan, like a Fannie Mae or Freddie Mac Small Balance Loan.

The commercial part which I assume is downstairs has to be less than 49% of the square feet and lenders may give a huge haircut to the commercial rents to be able to do a residential qualified loan. 

If you come back here and say, you called every lender on biggerpockets and sat in the chair of every local bank in your town and no one had any idea how you can get a loan, we can tell you what to do next. 

Could fetch 1300+ down the road with slight cosmetic updatesDetails: I would be using my VA loan with no money down to purchase.

He got really busy and only was able to renovate one of them now his construction loan term is up and he has to pay full mortgage on all three.

They've never bought real estate and want to some day buy a primary home and are concerned putting their names on investment properties will hurt their chances of an fha loan someday. 

States where it is hard to foreclose can change risk profile on loans, but also limit competition. - It's worth noting that states, both red and blue, are starting to pass statewide laws that effectively rezone land across the state allowing ADUs, or allowing multifamily construction.

Keep in mind that "funds" are unsecured loans with 0 security as opposed to trust deeds which are secured by real estate.