Hi, first-time poster here.

I live in TN and am helping my son (co-signing) to buy his first home. A property that's very attractive to him includes a main house, detached garage and a small "cottage" that is currently rented. He's a sculptor and could use either the garage or the cottage as his studio. His preference, I think, would be to do his carving in the garage and rent the cottage.

When I described the property to a local lender, she said no bank would issue a conventional loan for a property that had 2 dwellings on it. She agreed to consult with an underwriter on the use of the cottage as a studio--it's literally 20 paces from the back door.

I don't understand this restriction. Is this commonplace or possibly lender-specific? Would an FHA loan be a viable alternative if local lenders balk at the second dwelling? Any thoughts or suggestions where I could get definitive information on this would be greatly appreciated.

Thanks

Angus