It's not only the money you'll lose, it's the time you spend (I figure worth $100 hr) and the mental anguish and stress.

A second mortgage or HELOC might allow you to unlock some funds without losing the 3.25% rate.- I recommend avoiding condos. 

The lender at that point can exercise the Due On Sale and it becomes a problem for the subto buyer, who now has to find new financing or lose the house to foreclosure.

Learn the eviction procedure for your area, perhaps contact a lawyer in the field to help you with this one, and get the fraudster you're currently housing out on the sidewalk to sleep in a cardboard box where they belong.You're going to lose plenty of money here, but this will never happen to you again, and you can minimize your losses if you move as quickly as possible.

The program stipulates that you MUST stay in the home 5 years or you lose a pro rated portion of that 8k.

Step three is learning how not to lose it. 

If you were only going to net 10k and the fees male you a lose then it was never a good deal.If you keep project costs less than 72.5% of the ARV then no lending can screw you. 

Have you ever heard of a Landlord being sued by a Tenant and losing property?

That's before you pay any debt service.To answer your question: No, it's generally not a good idea to lose a bunch of money every month.

I know what my ideal life looks like in ten years, unfortunately, I don’t feel like I can have my ideal life now because I am having to stay in the state that I am in until we can move without risk of my husband losing custody of his child, which will be in about 10 years so believe it or not I do spend a lot of time thinking about what I want the future to be like.