Newbie question on FHA

[Clark Spruill]

I'm not sure if this is the correct forum, but here's my dilemma and appreciate any help or direction to the right forum or regarding this situation. I have a quadplex under contract. The plan was to use the FHA 3.5% down and live there (not-so-house- hack, very minimal rehab needed.) My dad cosigned the loan to help me get it (thanks student loans.) The inspection, appraisal, few concessions and repairs have already been completed and paid for. I received a phone call from my lender yesterday and she told me that my cosigner would either have to live there or I would have to put down 25% in order to use FHA. Why would I use FHA to live there with 25% down instead of going conventional and using it as investment? Lender said this rule was JUST added, I can't find it anywhere and am rather curious. I was told that I could use 3.5% down on a SFH without my cosigner living there, but that kind of defeats the whole strategy. Basically I'm just curious where to go from here, closing was supposed to be end of the month. Also, just curious how this new rule makes any sense to the people who put it in place? (Just trying to see both sides of this argument.) I appreciate any help or feedback, thanks.