FHA 203k - down convert a 5-unit to 4-unit possible?

[Jay Pei]

Forgive me for being a noob, I spent the entire weekend researching as much as I could... So it does appear to be possible to get an FHA 203k loan for a 5-unit & convert to a 4-unit.

When possible, aim for the Limited (aka Streamline) 203k loan, as it's less complex, not required to get an FHA consultant, etc.

Of course, this is based of the two following important assumptions:
1)  zoning allows for this
2)  and obviously I owner occupy for at least 12 months
3)  the total purchase price + renovations are within the FHA loan limits specific to my area

What I'm confused about is the timeline or chronological order of the process?  Is it like the following:

a)  Make an offer on a 5-unit that the Seller accepts
b)  Do my inspections, come up with gameplan
c)  Present the lender with final gameplan, once approved then proceed to closing & get the keys
d)  Have XX days to convert to a 4plex?

Or am I totally off, and the seller has to perform the conversion before I can make an offer?

Now I have a completely separate question (that derives off the above scenario)... As already established, the property is a 5-unit. It is legal non-conforming. Using the FHA 203k loan, am I allowed to subdivide the property? It would split the single parcel into two parcels, one side would be legal conforming 4-unit & the other legal conforming SFR.

Thanks in advance!