Parter with someone to bring the money or be a co signer on the mortgageThis could be a parent, sibling, friend who is more finically stable and the banks will feel comfortable giving a loan to.

So I spoke to one guy at L&I and he said he sees a CO for 3 family as being there, but doesn't see a specific permit/variance for the 3 fam.

There are distinct differences in treatment between a duplex and a triplex and the only reason I can figure out is .  . . because that's how it is.Even FHA loans have a distinction around 2/3-4 units, where the requirements of a co-borrower change depending on the number of units.

Traditional Loan with a Co-Sign

I have a pool of buyers who would like to house hack 2-4 units & pay ≤5% or less down - but need buy with a co-borrower who will not occupy.  

If that's still short for your 700K then adding you as a co-borrower should get him there I'd think.

Even if you have a co-signor (your partner maybe?)

My instinct as a CO investor was like some of these other folks - to simply follow the law and make sure that any tenants get the proper lead-based paint disclosures as renters of the property, and not worry about it too much.

If you are on the loan and she is a co-signer, then you might get better terms and you could go FHA (3.5% down).

What I've always done is simply have the parent sign a co-signer addendum, saying they'll be responsible, yada yada yada.