Both are conventional loans. 

Rookie investor seeking advice: Owner occupied property, conventional loan, qualified for 3% DP, sounds like a great deal for starter home buyers with less cash, and allow for greater appreciation for house-hacking owners, but what are the catch 22?

If you have cash, would you put down 3% (conventional) or 20% standard DP, and why?

@Reyna LopezNo, you won't qualify for traditional conventional financing if you switch from W2 to 1099 (although some alternative lenders have embraced the new CFPB guidelines that don't require income verification).Your best bet, if you are making the money you hope, is to get an asset based DSCR loan.  

Rates are higher than conventional loans.

I have a 30 yr conventional loan at 4.25%.

Closing costs can range depending on conventional vs private/commercial, plus each bank can have a different list of fees.For conventional, it seems closing costs average 3-4% of the loan amount and 3-5% for commercial.

There are some digital lockboxes that allow you to create multiple codes for different users. 

Due to the property's current state, I am not expecting to qualify for conventional off the bat.

Up to 4 units, you can obtain a conventional 30 year residential mortgage.