As @Erik Whiting mentioned, transferring ownership typically results in you paying off the mortgage immediately.And as noted by @Eric Johnson, most conforming loans allow a rehab window of 3 months, but once that rehab period is over you are required to occupy the premises for at least 12 months. 

A better term for me to use would have been conforming ie FHA,VA or FNMA which permission would never be given

@James CharmelloYes, they are basically telling you that the property has at least some deficiency that would prevent you from getting a conforming loan.

They're called portfolio loans because the lender typically keeps them in their own portfolio and doesn't sell them on the secondary market, which means they are unique product offerings specific to that bank and don't have to conform to Fannie/Freddie rules.

And now, you still have a better understanding of the property moving forward and you have a plan – then you start making money.Boots are Made for WalkingSo let's say there are issues that just make this a "no-go", like installing a sprinkler system, or something else that has an astronomical price tag to conform – then, it may make sense to kick the deal to the curb.

2)For Option A, which assumes standard conforming Fannie/Freddie loans,would it be difficult to quality for 4 residential mortgages within a12-month time frame?

Ultimately, I felt I needed to go to conform to what was then, 2006, a clear cut path in life that I must graduate high school, to go to college, to be successful in life.

@Chase Gruening - that is a conforming guideline, 70% for NOO 2-4 unit. 

My wife and I found a beautiful house from the 1920's that had been converted into a non-conforming duplex back in the 1980's.

Purchase price: $350,000 Cash invested: $35,000 Bought as primary residence, converted a den to a 4th conforming bedroom, cosmetic updates, lived there for just over 2yrs, then rented to 4 roommates.