you can use a sba loan for this... hard money typically is non owner occupied..

Your down payment on an owner occupied property here will be less than an investment OOS.  

Has anyone purchased an owner occupied single family and rented the rooms?

If you can get the property occupied within 30 days, most underwriters will be ok with that.Once occupied, you need to have a Nonowner occupied policy, commonly know as a Landlord policy.

What do they look for with conventional owner-occupied mortgages? 

Taxes in some areas increase if not owner-occupied; contact your municipality. 

You could do a 3-5% DP owner occupied loan for the primary, and get away with say 30-40k invested in that, and have a low 3% interest rate.

Hi Follow investor/landlord,I have a duplex for rent, one unit has been occupied, other unit is vacant and has listed on market for 3 months but still haven't rent out.

It holds the property until a lease is signed and states failure to sign a lease or occupy the property results in deposit forfeiture. 

@Ari Dehbone here are the areas in SoCal that allow for Non-Owner Occupied short-term rentals (NOO STRs for short):Palm Springs: 36 total stays/yrFullerton (near Disney Land)Laguna Beach (non-residential zones)Huntington Beach (Sunset Beach area as long as you apply before 3/1/22)Santa Barbara: Inland (NOO in commercial zones and STR-Coastal Zone Historic Overlay Zone), Coastal (NOO unregulated, but court ruling allows for it)Joshua TreeMalibuBig Bear Lake (92315 zip code)Newport Beach (R-1.5, R-2 or RM Zones)You'll have to do your research on specific properties for cap rates and cash flow, but these are the areas I would look in.