Assuming an FHA loan and refinancing

[Dan Desler]

Hi All

I have a fairly unusual opportunity and was looking to get some thoughts from the community.

I am talking to the owner of a vacant (off-market) property about buying the property off of him. 

He has a balance on an FHA loan, and if he sold it is looking to just make back what he owes on the mortgage (which is below market value).

Obviously we could handle this as a conventional loan, but I understand that FHA loans are often assumable (he is going to find out if his is).

If I wanted to turn this place into a rental property I wouldn't be able to keep it as FHA, so my question is would it be possible for me to assume his FHA loan, and then refinance it to a new regular loan?

Are there are any rules about doing that, and would I be able to assume the loan and refinance without putting money down?

Thanks!