House may not qualify for FHA loan. Any options?

[Jacob Barnhart]

I have been looking at a property for a couple weeks that I believe would be a good starting investment for me. It is two homes, and I believe it is legally two separate addresses.  I got a tour from a realtor today and the bigger house was obviously a fixer upper. The small house is still in good condition with the exception of the  bathroom floor falling in, but I believe the small house must have been built much more recently. 

Toward the end of the tour the realtor mentioned that the house probably wouldn't be approved for FHA because it currently has no functional heating (non-functional natural gas heating) and there is some deterioration on the house.

Would I be able to be approved for FHA since there is another house in better condition that I could live in while I fix it up?

I would prefer to be able to live in the big house while I fix it up and THEN move into the small house to rent out the large one, but I'm looking at any options right now to try to figure out the plan.

I have enough funds right now to buy the house with an FHA loan and begin the rehab, but a 20% down payment would guarantee that I can't do much rehab for at least a few months.

So, options?

Is it possible to have FHA on both of these houses if one is livable?

Is FHA so strict it would prevent me from buying a house that I could have in FHA conditions within a few weeks of purchase?

Are there other loans I can look for? I wouldn't be comfortable with trying a BRRRR at this point with no experience.

Any other options I am missing?

[Jim D.]

Are the two homes on one lot, or separate lots? If they are totally separate, I don't think you can use one single FHA loan for both of them.