I am looking into house hacking and was wondering the restrictions to an FHA loan.

Conventional is the way to go , financing restrictions are not as tough, FHA loans go over every single detail with credit and cash going in and out of accounts, also strict on conditions of property, conventional always , if you have the down payment and good credit.

I was under the impression that any contractor could work on a HomeStyle loan house....your only restrictions are that plans would need to be approved by the inspectors before work could start and you can't make structural changes.https://www.thebalance.com/what-is-a-homestyle-loan-4686019

They are as follows:Requirements – Landlords who receive relief funds through the HUD program must agree to the following fair renting terms for a period of 5 years: i. a rent freeze; ii. just-cause evictions; iii. mandatory documentation with any just-cause eviction; iv. no source of income discrimination; v. coordination with local housing authorities to make new vacancies eligible to voucher holders; vi. provision of 10 percent equity to tenants; and, vii. no admissions restrictions on the basis of: 1.

There are still concerns that FHFA's refusal to help bear some of the harm that its policies are inflicting on mortgage servicers will continue to restrict funding available to home buyers and evaporate a meaningful percentage of demand.

The second thing that has been reinforced during this period is that it is good to have extra cash laying around to be able to procure needs (for example, I'm from a state that is heavier on the restrictions). 

The guidelines, which can also be found in the text here, are:i. a rent freeze;ii. just-cause evictions;iii. mandatory documentation with any just-cause eviction;iv. no source of income discrimination;v. coordination with local housing authorities to make new vacancies eligibleto voucher holders;vi. provision of 10 percent equity to tenants; and,vii. no admissions restrictions on the basis of:1. sexual identity or orientation,2. gender identity or expression,3. conviction or arrest record,4. credit history, or5. immigration status.viii.

So address these to things and you will satisfy your self imposed criteria.What gets you the cheapest deals? 

With an area having a 10% restriction limit on amount of properties that may be approved to rent, would you recommend not pursuing?

Or the CC's could lower the limits as lending becomes more restrictive.