This is an option to consider and many larger banks/credit unions and nationwide mortgage lenders have released new loan programs allowing 2nds, HELOANS and HELOCS.

They introduced a consumer alerts program back in 2012.

Then as people move out do the exact same thing to those units.You can get in with an FHA loan at 3.5% or a first time home buyer program. 

Great program.

Are there specific military programs or contacts I should look into for housing opportunities?

Our local towns and rental assistance programs really appreciate those that try to work with their tenants which has helped me several times through easier permitting processes.

In Minneapolis, are there programs in place from non profits and the government to aid first time home buyers with costs?

Can you give me some info on this program?   

I have found some information that might be helpful John.There are government backed programs like Fannie Mae Homestyle Renovation Loan and Freddie Mac Home Possible Renovation Loan, in addition to the FHA 203k loan. 

And you'll have the best rate/points options with a primary residence.Option #2 is great, especially if you're willing to move into one of the units (because the down payment minimum is just 5% or 3.5% depending on program), but as you mentioned it's really tough here to find small multifamily here.