The FHA 203k Rehab loan is a great product for buyers that are purchasing a property that will require work. There is one mortgage and one closing with the property appraised on the renovated value allowing the buyer to have the money available to complete the needed renovations.
The best thing to do would be to talk to your lender to see if your situation and the property qualify for the 203K program. Further information can be found on the HUD website below. As for borrowing from Family and friends before you do anything talk to your lender. There are restrictions on some loan products as to how much you can use as gifts, down payments,etc.
Another thing to ask your lender about is the USDA loan, where you can finance closing costs. Each individual has to be evaluated for the loan products the qualify for and each loan has it's own restrictions.
Quinn Realty Group