However, they need to be able to obtain a mortgage to be eligible for this.  

Your VA loan eligibility will allow you to purchase primary residency homes (lower down payment and interest rates) that you can later use as rentals.

Following is how the ROBS 401k works: Because you directly rollover your IRA or former employer 401k, 403b, Keogh, SEP, SIMPLE, or other eligible account, to your new ROBS 401k  plan, which then funds your business, you incur no taxes or early distribution penalties.Unlike traditional 401k plans that allow for a 401k participant loan, that is, borrow up to 50% of the account balance not to exceed $50,000, the ROBS 401k for business financing plan allows you to use all of your retirement funds to fund your start-up business.The ROBS 401k funded corporation allows you to draw a reasonable salary from the business.ERISA 408(e), and ERISA Reg. 2550.408 list information regarding the use of 401k funds to invest in employer stock of the employer’s corporation.The IRS formally commented on the use of 401k business funds on Oct 1, 2008 by issuing IRS memo commenting that the use of retirement funds is not disallowed but continue to be reviewed by the IRS.The use of retirement funds for business funding entails the 401k purchasing stock shares in a C-Corporation.

This is a strategy that people use when a couple plans to acquire a lot of properties to maximize the number of conventional loans they are eligible for.

Although the specific interest(s) that underlie a criminal history policy or practice will no doubt vary from case to case, some landlords and property managers have asserted the protection of other residents and their property as the reason for such policies or practices. 23 Ensuringresident safety and protecting property are often considered to be among the fundamental responsibilities of a housing provider, and courts may consider such interests to be both substantial and legitimate, assuming they are the actual reasons for the policy or practice."

Am I wrong in assuming that this is fundamentally a better situation than borrowing and buying a house by yourself?

@Michael RobertsIf you purchase a residential property with more than one unit (duplex - quadraplex) and live in one of the units, you may be eligible for a high ratio mortgage insured under FHA or a similar program.  

If eligible, yes. 

Those which are eligible for these programs are vacant/abandoned, vandalized (stripped of mechanicals, plumbing, electric) and are in need of more repairs than they are worth if someone were to buy them from the owner due to the amount of back taxes due.

@Ross Ellington If you are a disabled vet, you may be eligible for a tax exemption on your primary home as well."