FHA Funding in Los Angeles Area on a 4-Unit Building

[Christi Lane]

Hello! I am looking into House Hacking in the local area where I live (Los Angeles/Orange County). I spoke with a lender about the possibilities of doing an FHA loan on a 4-unit building. He said that in order to qualify for the FHA loan that the property essentially needed to cash flow positively even with you living in one of the units. Is this correct? Are there any creative ways around this? It is hard to find positively cash-flowing properties in Southern California in general. Otherwise, my only other option would be to do a conforming loan with a minimum of 20% down. (Trying to use as little out-of-pocket $$ as possible.)

Looking to pick something up with 3.5% down up to $1.2M in the Long Beach area. 

Any thoughts on what I should do? Thanks!