Hey, I was planning on purchasing a home in the area I am located currently since it looks like I will be out here for a 1 -2 yr contract and the property taxes are low (compared to NJ, but who isnt) and townhouses are decently priced. My employer brings in hundreds of people a year looking for rentals and rooms during their contract period and I thought I would capitalize by buying a townhome and renting out the rooms as my landlord is currently doing. I would live in 1 bed room and rent out the other 2-3 rooms. I just want to know how I can find out if this is legal to do in my area. Most of my cowokers rent out rooms and it seems a common practice but still want to know if this is ok as I would like to have leasing agreements. Also am I allowed to rent within the first year if I purchase the home through an FHA loan? I know you need to live in the home for the first year which I will be doing but I dont know if I can rent during this period?

You can get your landlord statute (if any) from city hall. You are always allowed to have roommates. As long as you are technically living in the property, there is no violation of the FHA agreement.

Even if city hall says you can't have a rooming house, you can still have roommates. 

Be sure to have signed rental agreements. I suggest month-to-month for this scenario. You will want an easy out if you happen to get a rogue roommate. I rented out rooms in a house that I rented, with the owners permission, to medical students doing externships in Seattle back in the 1980s. Worked out great for them and great for me. I provided the rooms fully furnished and the rent included all utilities and household supplies! Each person was provided with a kitchen cupboard and their own shelf in the refrigerator. Typical stay was for 3 months. Worked out great.

yes,  you can do this but you probably want to look to see if there are any "unrelated persons"  ordinances.  Some towns limit the number of unrelated people living in a home. I would think this would need to apply to all residents but may just be for non-owner occupied.   I have seens limits starting at 4 or more unrelated people are not allowed in a dwelling.