No Conventional/FHA Financing Moving from Single to Multi-Family?

[Todd Ashley]

Howdy! I have run into an unexpected road-block during the pre-approval process for buying a small multi-family property (2-4 units). I am planning to buy a small multi and turn my current home into a SFR. Yesterday I was told that I could not get approved for an owner-occupy loan because it is unbelievable that someone would be "down grading" (their words) from a single family home to an apartment. I was shocked by this so I called a couple of local credit unions to see if they were more flexible. I got the same answer. I was told my only option was to purchase a property using a non-occupied loan with 25% down. Is this really that rare? Does anyone have experience with this? There has got to be a way.

Thanks in advance!