Convention Financing on Two Four Families under 50k Each?

[Eric Castelli]

I recently went under contract on (2) 4-plexes (same seller) with a purchase price of $47,500 each.  Based on what I have read on BP, it was my belief that I should go conventional on these loans (I only have one conventional on my primary residence).  However, I have now spoken with two separate lenders and they both want me to go commercial.  One even told me that the government won't allow conventional loans of less than 50k because this causes a red flag with the closing costs being such a high percentage of the loan value.  I'd love to hear feedback on this.  Specifically:

1) Has anyone ever heard of this 50k loan min on conventional, or are these guys just trying to push me down the path that is better for them and not necessarily me?

2) Assuming conventional is an option, which would you do? 2 conventional loans or one commercial (20 year amortization, 5 year balloon, 4.5% APR with 20% down).

Thanks in advance for your thoughts!

Eric