Here's a more detailed explanation of what' happens...and why:1 - There are two types of REFI's - Rate and Term, and Cash out2 - Rate and Term Refi is where you refi strictly to get a better terms (int rate, term, monthly pmt) than what the original loan (existing loan) terms are. 

@P Baxter Hudson    $800/mo for each side of a duplex in that price range is not uncommon at all in that area of Cleveland for a place that is rent ready. 44105 is actually not a bad zip code either.

But they are strict due to the lack of affordable housing here. 

The can of worms may be a lot of money bringing it up to current code if and if/where it isn't up to code.

Does anybody know how strict this is and if there is consequences for renting out a property after securing it through FHA?

Sometimes they have strict regulations which type of property you could buy/refinance with FHA loan and primary residency requirement.

@David Ward Focusing strictly on investment properties and putting down 20-25% like you mentioned Boston is an expensive market to begin with then you thrown in the low interest rates to keep the economy from crashing and you’re seeing prices 10-15% higher then last year alone, it’s a terrible time to be a buyer unless you come across the perfect deal but those deals probably won’t even hit the sites before they’re already sold I would suggest hitting Zillow and contacting the most popular realtor/brokerage in the area because that’s how you’ll find that perfect deal.

If it is a shed and you get a code violation/red tagged from the city you will run into problems when you go to sell.

What zip code is your property in?  

Tax Code § 34.21).