10,000 0% interest loan for owner occupied duplex. Is there a downside?

[Nicole Carey]

I am looking into purchasing an owner occupied duplex in Burlington, VT. The local economic development office offers $10,000 deferred payment loans at 0% interest with priority given to first time home buyers (that's me!) and it is something we are looking into using if we find the right property. There are many restrictions but the one that makes me wonder if it would be worth the 0% loan is:

The one restriction that has me wondering if it would be better to not take advantage of this program is: Required affordability in the tenant’s unit: Purchaser cannot increase the rent of the rental unit for 1 year from loan closing and rent cannot increase more than 3% per year for the 4 subsequent years OR rental unit is occupied by a Section 8 tenant for 5 years from loan closing.

I would love anyone's advice/opinions.