Kim,
We've been trying to get a loan on our own, so we haven't spoken to the owner about those options yet.
I don't think that there is a mortgage on just the property that we wish to purchase, as it has been subdivided from another property, and they had originally been purchased together.

Bill,
That's just the thing; for a construction loan, they either want it to be raw land, or they would require us to tear down the existing structure. We've been exploring the options of small banks and reaching out to ones that may listen to our story. We've had zero luck with large banks. We've seen other barn conversions in the county, and there is an old farmhouse renovation right next to it that is on the market for about twice what the purchase/reno of the the barn would cost. It's a great project, we just have to find someone who'll listen to us long enough to find out what a great project it is!

Thank you both for your insight.

Can the owner/seller offer you short term financing until you get enough of the work done to qualify for an occupancy certificate and get a loan from a lender?

Does the current owner have a mortage on the property? Who wrote that loan? Might it be assumable?

I don't understand about the construction loan because if a person owns a house and they want to tear it down and rebuild it, it doesn't have to be on raw land. So, I'd tell you to go to a community bank or credit union and tell them that you want to restructure the barn for living conditions. It's not going to be easy because there is nothing like it to allow the bank to know if they can sell it if you default. You may have to find another barn conversion to show them the value of the home after it's done. Is the area condusive to barn homes? That's what they'll ask.