You are going to want to talk to several professionals in your state for this one as it is a legal maneuver that amateurs or even professionals not familiar with the details of your situation on the internet probably aren't going to be able to help with much.

Sometimes banks are hesitant to approve an owner occupant loan for someone moving from a SFH to a MFH because they suspect mortgage fraud.

My husband worked at legal aid until just recently and spent a lot of time in eviction court while he was there.

In Canada we aren't allowed legally to take a deposit for potential damages, instead we take first and last months rent ahead of every lease . 

Its always better to start the pre-approval so you know your eligibility. 

Limited Liability on you personally: If you were sued (a tenant is injured on your property) or had a legal case against you as a landlord, it would be against the corporation and not you personally so it can assist in protecting your personal assets in this type of situationThe title of the property will be in a corporate name but you, the investor, will be required as the owners of the corporation to also provide personal guarantees.

Tons of legal advice.

If the shower was fully built before it was caught that it wasn't legal, I have serious questions about the ability of the inspector who signed off on the rough inspection (or if he got one).

@Devin Borders - I can't speak to if there is a legal way to both assume/pay their mortgage and fully protect yourself, but I am sure there are others that can.One thought I had was if this property is off-market and ~$220K in value, I'd offer much less for the following reasons:  If you can do this without realtors (if it is not currently listed with one), that would save the sellers 6% in commissions (~$13k).  

I actually had a lender approve me for up to 200k but it was FHA and all the fixer uppers were out of the question as they didn't meet FHA rules, and the 3/2s were highly desirable and went well over 200, so I wasn't able to get anything last year.