Using a home equity loan to buy another home: Good or Bad Idea?

[Shamar Armstrong]

I live in New Jersey and have had my condo on the market for a few years now, off and on. I do still live in it. It's not selling because I am also in an affordable housing program with the township and can only sell my condo to other approved applicants according to township rules. Plenty of people want my condo but don't meet the Township requirements to buy. I also need the equity for a down payment towards a new home. But there is a possibility I may be able to rent my condo.

I have a bit of equity in this condo so my thoughts are to take out a home equity loan on this place and use the money as a down payment on a new home, then rent out my current condo to cover the cost of my existing monthly mortgage and the new equity loan together. So i would now have a new home and a rental property. I wouldn't make profit off the rental until the mortgage and equity loan is paid off, but it finally gets me out of the condo and will build up more equity And rental income overtime. 

Can someone help me spot the "unforseen" issues and holes in my plan and recommendations on what I should do? Or is this even a good idea?