I don't think its necessarily cut in stone, especially since they aren't conforming loans so its basically unregulated. 

Basically, he is able to avoid all the bank requirements and cut out the middle-man syndication. 

In particular, in desirable areas, for permanent/good financing, often 25% down doesn't cut it. 

Cut 50% fed programs, offices, branches etc.

I'm completely fed up and I am trying to figure out if it's worth keeping to rent out or if I should just cut my losses and sell it. 

Those are the organizations that are highly likely also going to support finding their hires a place to live and if you can connect with them and become a preferred vendor, you've cut out the middle man i.e. furnished finder.

I believe the term is called "subrugation "  Where you cut a deal with a builder , he builds the house , when it sells you get paid for the lot .Dont sell at any discount 

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Additionally, your response seems 'cut & pasted' as you bring up things, which have nothing to do with my original post. 

Most hard money lenders will cut the initial loan amount on the purchase, if the rehab is self funded/financed.