Not without the bank signing off on it.

Problem is only "RE pros" get to do it.There are 3 income classifications in the US - Active, Portfolio, and PassiveActive income is income derived from your job, or normal trade or business.Portfolio income is derived from bank instruments - stocks, bonds, etc.Passive income is income earned from investments.Active losses can wipe out both passive and portfolio income, but it doesn't work the other way around.Portfolio (capital) losses are limited to $3,000 annually.Passive losses can only be offset by passive gains.Real estate rental income by its nature is deemed passive per IRC Sec 469One way to get around it is to become a pro - spend more than 750 hours or 1/2 your time in real estate.But most folks aren't real estate pros.

If you can find smaller local banks in the market you pick they may have more unique products that they keep on their balance sheet or try and do the 5% down conventional on a 4-unit  FHA's self-sufficiency test applies to both 3 and 4-unit properties.

How seriously is it enforced2) Who will do the transfer, do we have to tell to the lender or the bank?

I have an assistant enter this once a month from the PM reports provided (and just a bank account statement for the single tenant properties which don't have PMs).

Given the seasonality there's likely slow workflow from the banks so it would be a good for you to apply, get approved, and be well poised for the spring market!

How does one take the owner finance situation to a bank and turn it into a 30 year loan to hold without an additional down payment of 20 percent ?

You'll want to make sure multiple banks look at the deal to see general appetite for financing.What happened to us is we took over a string of condos from a non bank lender that foreclosed on the properties. 

I have Baystate Bank on one property and TD Bank on another.Hope that helps!

Texas division of banking (whatever they are called in that state) probably should have done something but appears they didn’tDHS actually is one of the departments that prosecuted criminal financial crimes - most think of them only as border patrol as their major function but they also investigate this type of activityhttps://www.dhs.gov/hsi/investigate/financial-crimeTime will tell if these cases ever go anywhere but for those involved probably just happy someone finally picked up a phone to atleast listen to IRS criminal is another good one to sic on them..