I spoke with Veterans United and confirmed I am able to assume as a civilian and that I can use this property as an investment property.

The renovation costs may include a contingency reserve and renovation-related costs.Contingency Reserves:Contingency reserves 10 % required for any unforeseen cost overruns that may occur during construction.Unused contingency reserves that were financed into the loan will be applied to the principal balance of the loan.

Then you would need to work with them to allow you to then sell it and pay down the existing and confirm the home you keep still has equity.

So, given you are in a lower end area with lower rents, you need to reserve more money on repairs, maintenance and capex compared to a higher rent area, since that $200 HVAC or plumbing service call is 25% of $800/mo, but 10% of $2,000/mo.  

In addition, the complaints are reading that the non-profit used actual actors/"testers" to reach out to me on these listings to confirm what these 2 individuals were saying was true, which of course, I also replied, "Sorry, no vouchers".Now I've had to hire a lawyer who specializes in cases like this, and has actually gone up against this non-profit in the past, but with a much bigger client who owned 20+ apartment buildings, and was also openly saying "no Section 8 vouchers".

I believe I’d need to live there for at least 2 years and hold the property for 5 years but would like a confirmation if possible?

You both confirmed what I was suspecting.  

I've included an example below to help illustrate this.So different lenders have different rates (which do vary even for DSCR loans) but these are factors they all consider.See example below:DSCR < 1Principal + Interest = $1,700Taxes = $350, Insurance = $100, Association Dues = $50Total PITIA = $2200Rent = $2000DSCR = Rent/PITIA = 2000/2200 = 0.91Since the DSCR is 0.91, we know the expenses are greater than the income of the property.DSCR >1Principal + Interest = $1,500Taxes = $250, Insurance = $100, Association Dues = $25Total PITIA = $1875 Rent = $2300DSCR = Rent/PITIA = 2300/1875 = 1.23If a purchase, you also generally need reserves / savings to show you have 3-6 month payments of PITIA (principal / interest (mortgage payment), property taxes and insurance and HOA (if applicable).

The lack of clear communication from the lender left us in the dark, wondering if this deal would ever see the light of day.The night before closing, we were still in limbo, with no confirmation that the deal would go through.

However, also don't forget to budget for turnover costs and capex reserves too, which many people ignore.