My lender said that buying a duplex is not an issue at all with a FHA loan, but he was worried that the seller is giving a pro ration of the rent & the security deposit back as an incentive to buy.

@Suvir B.As per usual, you provide thoughtful rational analysis.I can’t disagree with any of your assessments. 

It's up to you to make that determination given your situation, market, and long term goals/cash flow needs but thought I'd share a perspective and some metrics I don't see shared as often on this site....or, instead of rationalizing a bad deal, look at it this way.He's paying $60k in cash, for $4000/year, for 15 years. 

I know he meant well.I want a watch dog on my team, but I want that watch dog to be supportive of my rational, educated choice to move into REI.

Rarely does the government make decisions that are rational.

Fear is a perfectly natural emotional reaction to anything New and Big and Important and comes with Risk.Give your rational mind some exercise.

And it's wise to build a contingency should a big repair come up.I assume a 45% expense ration as a quick calculation and firm up the numbers based on the data. 

L.A. saw the nation's largest number of small business closures due to COVID-19 and a winter surge in cases, forcing health care workers to start rationing care.

Also, I do not want my debt to income ration to increase.

I suppose this could be a brand new agent, but even if that were true, he should still know better.Assuming that there's no rational explanation, I'd contact his broker and file a complaint with the local Board of Realtors, assuming that he's a member of NAR.