I'm currently in the process of rehabbing a duplex I bought with the 203k loan. There aren't many small multifamily properties in my area, let alone duplexes (I got lucky on this one), but it was worth being picky about. Like @Erich Beyer stated, a 203k is your best bet in your situation because, while you have to do the rehab and work, you will be able to instantly force equity into the home, and can refinance out of the FHA almost immediately.
As for renting out the property, by legal standards, your intent should be that you are moving into the home as an owner occupant. You have no intent to rent it out, nor will you be allowed to under FHA standards. While this loan is meant to subsidize the housing market and get first time home buyers into homes with less of a financial burden, they have no real way of policing much more than the one year they state in the contract. Many outside factors can happen that they cannot control. That said, if you find a good enough property that you can build in enough equity immediately, you can refinance out even before the year prosecution period is up, and be on your merry way into your next property. Ultimately, you are legally bound to living in the property as an owner occupant, and if they find out that it is being used otherwise they have legal ability to sue you for fraud and damages. (I've heard up to $10K, but it could be more).
Be patient and look for multifamily opportunities. FHA loans allow you to buy up to a 4 unit property. In those cases you can live in one of the units and still be almost sure that your loan is being covered by the other 3 units.
