2 Townhouse, 1 loan?

[Andrew White]

Hello,

I currently have contract to buy a duplex in Lexington, KY.  Two weeks into the loan/under writing process, the lender just told me the lot/structure is considered two townhouses, not a duplex (I confirmed he is correct per local PVA). 

Instead of one conventional loan, the lender now requires two separate loans (split total price) to purchase.  Downside is split single contract into two, double closing costs and increased mortgage insurance costs.

MY QUESTION:

Does this sound correct, or is the underwriter mistaken...Do multiple townhomes require their own individual loans for each single unit (even if apart of the same structure)?