I would be very careful with this arrangement for your clients.

There are some legal considerations as well as practical considerations 1.  

After 2 years you can apply for a “Rent consideration” (I think that’s what they called it) as long as you still live there and that may allow you to increase rents by more than the annual allowance (probably designed for unit that are very low rents).

Be careful when you select entity types.A pass-through entity in the United States, such as an LLC, may not hold the same characteristics in Canada.What market are you looking to invest in?

I'm a GC as well and did the math, the Heloc would save considerable interest because it would average on 33% of the balance borrowed at any one time (and thats assuming constant deal flow).  

They do not care.

To be brutally honest i don't care if it's at cost, below or above, I only care what it is exactly and how much. 

You've given me some solid pointers/items to take into consideration for future deal analysis, so thank you for that.

Does the bank take into consideration the income from the other units?

But you could always request an inspection checklist from your Section 8 and start getting those things taken care of ahead of time.