Subsequently, he said that I can't carry a conventional mortgage with a FHA loan saying it is one of the stipulations. 

I was thinking one of the stipulations for the FHA first time home buyer program was you could never have owned a home.  

it is my understanding that the owner of the property can not benefit from a short sale and the documents that the bank requires will stipulate these conditions. theonly exception is under the HEFA program where the current owner can get a $3000 relocation payment.

Also, who will be putting together the actual closing contract, or mortgage/note you will have with the Owner that stipulates how you will be responsible for their payments and stipulates their rights if you don't pay, etc.

So make your offer with that stipulation.

We also abide by your personal restrictions on your property - if, for example, you'd like to stipulate that you don't want to rent to families with young children, then we will make that restriction part of your booking process. 

My offers stipulate that my EMD will be deposited into escrow within 3 days of written acceptance of offer.

If the contract stipulated that the money you put down was OPTION MONEY then it might not be classified as EM and doesn't have to be held in separate escrow accounts.

I am in the military and have moved to D.C area and want to try and utilize my VA benefits instead of the liquid cash I have saved to try and buy my second home ( if I buy in this area).I've recently been looking and speaking to real estate agents to try to figure out what are my options and all have said I'm forced to buy in area I live bc VA stipulations say owner occupied.

The owner got approval for the fields in 1989 with the stipulation that he make that portion of the land a permanent part of this property (it appears to be 2 family members who lived next door to each other, so I think they all shrugged and blew that part off).