With such little capital I figured it is best to house hack until we can grow our capital large enough to do conventional loans.

Will be looking for a conventional loan and putting down at least $20k. 

How are you able to balance the two to keep you conventional financing available?

I have personally always used conventional financing to buy "fixer uppers" that I can put some sweat equity into.

Now, when it is time for a military move then you can do it again at the new location with the remaining amount of the VA benefit or refinance the VA loan into a conventional loan and use the full benefit again.

I financed the property with a conventional 30 yr mortgage at a 5.75 interest rate, 20% down.

(decent deal in a HOT Chicago market) but the home comes with some violations from the prior owner, they are 10 and 5-year-old violations, my attorney believes should not hold up closing, my mortgage broker has a different opinion. the total to cure violations is about ~30k-40kMy lender misleads me from the beginning of the transaction, leading me to believe I can purchase the property with conventional financing and 10% down, he knew the property had violations.

I was denied from the bank so now what I'm trying to do is to get a loan from a different bank as a owner occupy conventional loan putting $15,000 down.

The only difference in the contract between an owner finance and a cash deal or conventional financing is the section of the agreement that relates to payment of the purchase price.

Be sure to talk to them about 3% down conventional loans, because FHA loans are notoriously difficult, and sellers will prefer a conventional over an FHA, because the FHA appraisal requires the seller to fix little things like peeling paint, broken window panes, loose handrails, etc. while conventionals typically do not.Some borrowers are approved for a higher loan amount through FHA than conventional, but I believe the MIP is generally higher.Also, this is something your agent should be helping you with.