This is several thousand dollars less than I would’ve gotten at the full 75% LTV, but she claims it is a Fannie Mae requirement?

The Conventional ones, Freddie Max Choice and Fannie Mae HomeStyle will allow a 2 unit owner occupied property to be done with a 15% down payment based on purchase price + rehab dollars.

Does it violate Fannie Mae guidelines?

If you can occupy the home as a primary you would not be able to buy another home under FHA.You would either have to refinance the lady bird home into a conventional loan or buy the next home under Fannie Mae/Freddie Mac - if primary.

Fannie Mae LLPA matrix

With the new Fannie Mae 5% down payment conventional option on multi-family properties, I figured it might be possible to follow through with this strategy.

@Jacob Maes Definitely possible in the DFW area.

I have been reading Long Distance Real Estate Investing - David Greene, and came across an interesting tidbit of information: Your first 10 (1-4, 5-10) property loans are Fanny Mae insured, after which your loan criteria become more unfavorable (variable rates, stricter credit score requirements etc.).

Remember, your loan is sold off to Fannie Mae. 

Molly is right- Katee is great.