I do not have building expertise, however am connected with a great builder who has those skill sets, so we combine our experience enabling us to embark on and execute projects we otherwise could not do well on our own.

FHA), that would enable you to put as low as 3.5% down on a multi-family property, as long as you were living in one of the units. 

If you are just starting off and are somewhat new you might want to consider "strong business credit" this will enable you to build your businesses credit to attract more traditional lenders.

As  @Ned Carey so eloquently stated, your grandparents are not helping the tenant, they're enabling the tenant. 

Another item is confirmation from the first position lender they will allow registration of a subordinate lien/mortgage {with many residential bank mortgages here, registering a second, especially w/o their consent, could enable them to call the first}.

Same idea, trying to push investors out, and to enable owner occupieds to compete. 

In theory I imagine that would enable the single policy to cover the others.But maybe it really is simpler than you think... isn't this the whole point of an umbrella policy, anyway?

I'll be putting 5% down so this would a) lower the funding fee if I went with VA and b) enable me to use FHA if the VA numbers don't make sense for whatever reason. 

Indeed, as the private economy inevitably suffers across the country and rental returns flatline, we look forward to offering strong returns to outside investors, in effect enabling us to suck up outside liquidity.

Seems you already expect that you will be taking a but of a financial hit so why not do the thing that enables your borrower to offer "cash for keys"?