Below is what a lender explained to me when I posed your question to him.They will need 15% or 25% of their own funds if they do not occupy one of the units.With Fannie Mae the maximum loans are:2 unit = 85%3-4 unit = 75%So investors need 15% or 25% down respectively.Now if they are primary residences, FHA may make the most sense, but you won’t necessarily be able to do more than 1 FHA loan.FHA max LTV’s are:2 unit – 96.5% financing3-4 unit is also 96.5% but some additional requirements exist.I would recommend talking to local banks as well.

Allow me to explain... it's a single family home that used to be a "duplex".

@Mike Sedlacek Thanks a ton for explaining the reporting terms.

I think it's alway nice to get things explained in this way because it provides a ton of perspective.Do you have any other ideas for phase 1?  

If that isn't clear, I can try to explain it another way.

Explain what you want to do and see which ones can accommodate you.

I added the below link to a blog that explains this as well.https://www.biggerpockets.com/renewsblog/2013/04/1...

I explained what happened and pretty much told me I had 2 choices.  1, do nothing and the guy is just out and I through all of it away.  2, schedule a time to let him come in and move his stuff.I choose option 2 with come guidelines.  

And to put topping on the cake the listing agent is really  not trying to hear our concerns or give explaination due to him thinking he knows me.

I explained to them why I felt the need to offer 37 (a lot of uncertainties with this house and I was not willing to take such a risk).