It's not conventional financing and the rules are made up by the individual companies. 

Meanwhile, you have the duplex to consider.I don't know South Carolina, but your duplex does not meet the 1% rule.

I am looking for those REI meetup groups that are of real value with members helping and supporting one another. 

There are tons of things to consider from zoning and land use rules, utilities and nosy neighbors who may not want "those kind of people" in their area. 

Depending on your state, small claims would probably rule in your favor.

Does the FHA rule of living in the residency for a year apply to this loan as well?

That is not a rule but it is fairly standard, (though there are ways around it).Assuming 6 months from the time of a cash purchase to refi is a safe assumption. as for your 70k, aren't you considering doing a BRRRR?

So who would know the local rules in PA?

General rule of thumb is "toddler and idiot proof," and a toddler or idiot could easily electrocute themselves or fall off where there aren't handrails, so that needs to be fixed. 

I think it would take pretty strong ecenomic shock felt globally to see it roll out otherwise.I also wouldnt be surprised if there was some relief provided in the mortgage stress rules.