Financing for new RE investor - primary residence swap?

[Jed Hefner]

Loan / investing approach question:

Existing primary residence (3br/2ba 1600 sq ft with a pool) is currently on 15 yr conventional with approx 60% equity. (Payoff is $85k, House could sell north of 200k).

Looking to do first RE deal...considering possibilities of small MF (2-4 plex) and thinking of possibilities of arrangement and financing.

My understanding must be primary residence for purpose of FHA...anyone have experience with getting into RE like this?

My challenge is that I have a growing family (wife and 3 kids under 5), and it might be hard to move into a smaller space...any advice on potential options to get into the RE game once past the roommates stage for house hacking?

I was thinking maybe occupying 2 units in a 4-plex but also recognizing that would cut into cash flow for that hypothetical property, but would open up rental options for current primary residence.

Am I just way overthinking this?

TIA

-Jed