How do I Finance my "First" MFR House Hack/REI?

[Ashley C.]

Hi! I'm interested in purchasing a multi-family residence (duplex?) in Sacramento. Why?   

I'd like to a) start investing in real estate, and b) if I have to pay for housing, I would love to have some help paying a mortgage (hello, house hacking)!  My challenge is that three years ago, I signed onto the deed and mortgage of my mother's home (our family house) to help her refinance and consolidate debt, without really understanding what that would mean for me when it came to buying my own property -- so I technically "own" a home already. 

Now that I'm looking into ways to purchase a property for myself (I can potentially qualify for something in the mid 400s) I'm running into some roadblocks. 

A lender I spoke to told me that I do not qualify for an FHA because the house I "co-own" is within 100 miles of where I would be purchasing, and the only way that I can make a true duplex work is with a conventional loan and 15% down (which I do not have). Fortunately, my mother is moving, and we'll be renting out her house starting April 1, so that covers me on the DTI part, but I'm trying to figure out if there is a way that I can purchase an MFR so that I can live affordably in Sac, have REI, and not break the bank.

Any advice? Thanks in advance!