Lender said we can't get FHA Loan - Not sure on conventional

[Stephen Spain]

Hey Guys, 

I currently own a 3 family that is fully rented and cash flowing. I'm currently renting elsewhere. I'm looking to buy a new 2-4 family that I will owner occupy for 1 year with a partner who owns his own primary residence and will be a 'Non-Occupy Co-borrower'. We have about $10k we can put down for a down payment together and are targetting houses around $200k-$250k. The lender I spoke with to start says we can't qualify for FHA because FHA 'prohibits non-occupy co-borrowers that aren't family'. So that leaves us with conventional. He says for 3-4 families we can only put 20% down for conventional, which would put us in the $40k-$50k down payment range, that would leave us no room for renovation and would dig way more into savings. Are there other ways we can do 5%-10% conventional loans? Possibility for FHA with more creative approaches? Any recommendations for our situation? Thanks!