The items you mention MOSTLY qualify.

You can use that income to reduce your DTI and be able to qualify for a higher mortgage, if necessary.  

Down payment can be higher than primary, but the good thing is that you won't need that much income to qualify because lenders can you 75% of the market rents for the units of the property.

As long as you're able to qualify for conventional loans, this will likely be your best option.

If the remedy was designed by a qualified professional, the work carried out be an experienced contractor, the work was permitted and inspected by the town, then the value reduction would be zero.

@Matthew Kauk I think the question you are asking is how can I qualify to offset non-passive income (e.g.

@Elani Sevilla, just because you do not have a W2 job, does not mean that you will have a hard time qualifying for a loan.

2) Am I right in understanding that you can qualify a project by setting aside 20% of the units to be rented to people earning less than 50% of the AMI? 

I know one of the main qualifiers is it has to be owner occupied - which is fine.Will there be any issues with this second purchase being in the same town as my first MF home?

You will need to make sure you can qualify for the $200,000+ loan.