I'm individual but there are companies who do the same thing.

My plan is to house hack a small 3/4 unit multi-family next spring/summer, preferably with a 5% down conventional loan along with some PMI (assuming the figures work). 

We and most QIs don't prefer this because its always best to match the deeds as closely as possible since the first person looking at you return in an audit is a field agent of very limited experience.   

At a minimum you'd want to work with a mentor or (preferably) attorney that is experienced in distressed property matters and well-aware of the many legal pitfalls. 

Your individual situation has to be evaluated. 

For example, if you're LLCing it - which may make sense for a partnership - that'll make it more difficult to get a conventional mortgage.Like anything in real estate, if you're going to be including or working with another individual, you'll want to sit down with a good lawyer and put contracts together that protect both parties in the event that something goes awry.

One of my original preferences is for there to be city utilities instead of private.

Preferable a reliable company that has reasonable fees.

- Any preferred lenders?

They have no idea they are operating a business and prefer to not think about it.