He will do a cash out refi on the property and we will use our loan to pay off that refi.

Higher interest rates continue to make it more difficult, especially for an investor that is looking to house hack, cash flow, or DSCR loans on the commercial side are a nightmare. 

Looking for short term rehab loans.

I’d like to loan around $25k to start, but I’m undecided on loan terms, so any guidance in that area would be great.

I ultimately decided to leave because once I had to transfer to a university from my local community college to gain the 4 year degree the thought of going into student loan debt didn't sit right with me.

(The rate we got is irrelevant at this point, we pretty much took out the loan in the nick of time)

The lowest option that is common is a 3.5% down FHA loan that is used for a primary residence.

If I am understanding the situation, you took at a 12 month loan and it is now due and the lender is foreclosing (I do not understand the six month comment).Here is the reality, getting a lawyer and spending $ to delay a foreclosure is only going to cost you more $ as the lender will also have legal costs that get added to the loan and you will have legal costs.Your options are refinance or file bankruptcy.

5% down conventional loan at 6.999% interest How did you add value to the deal?

Now if you have the cash to pay off the underlying loan at anytime if there is an issue then your risk goes down to is your buyer going to pay and if not are they going to trash it.. same issues you have with any tenant.