Identical ownership creates a related party issue.   

You may not be on the operations side of your business.. but wire fraud is rampant and title companies are targeted.. .One of my clients got hacked..

(Currently Renting elsewhere)We have renovated the property and it is now worth about $540k- $550k - we purchased for $347kLooking for a loan for about $415k or so.We tried to go FHA with no luck because it has to be in my personal name for 6 months (LLC doesn’t count)We were quoted a high interest rate for conventional.We talked about straight up buying the house from our LLC with an FHA for 3.5 down but our lender told us we can’t do that because of an Identity of Interest rule requiring 15% down.

If the bold parts aren't true then it's MORTGAGE FRAUD.

It is being sold for 550K but a identical property sold a block away for 775K.

@Rameez Balagamwala @Andrew Kerr touched on the main issue with the bank underwriter always taking the conservative route.I faced this issue when I was living in a property and wanted to purchase one 3 miles away and move into the next property using an Owner Occupant rate and 10% down, the bank underwriter flat out stated they didn't see me moving from the class A+ new construction property to the class B- property, I replied that I would not be committing mortgage fraud to get a 1.25% reduction in the mortgage rate.We agreed that I would sign the Owner Occupant Affidavit as a part of the loan package stating I would live in the property within 60 days of closing and would not move or rent the property within 12 months of closing.

Sounds like mortgage fraud to me... 

I have heard of the fraud issues, but with inspections/appraisals I'm not sure how the money is dispersed if the work hasn't been completed on the specific property.

If you are planning on living there for less than a year, it's an investment property and you would be committing mortgage fraud if you purchased it as a primary residence.

I have 2 brick duplexes, that are almost identical, 2 blocks apart, same neighborhood.