If in 10 years the rate is 11%, you will have paid down your principal balance significantly and likely inflation will have happened, so your rents will have increase (and expenses), resulting in still solid cash flow. 

That doesn't include appreciation or principal pay down, just cash flow.  

Interestingly enough people will most likely shiftmoney away from real-estate and into TIPS or something that is protected against inflation.In my view you are faced with the decision:purchase a house with falling prices and rents (due to the recession that would follow), or put your moneyin something that protects the principal value against inflationary pressures. 

Borrowers are not allowed to complete any of the work themselves as sweat equity.Loan to Value Calculations:The original principal amount of the mortgage may not exceed Fannie Mae’s maximum allowable mortgage amount for a conventional first mortgage.

I can not guess what score any individual may have therefor reject any applicant that does not have a score.One principal I have always operated on is to never work to try and make a applicant acceptable.

Now I have more liquidity and can pay down the principal balance much faster than with the traditional amortized loan. 

You dont get taxed on the principal amount. 

@Patrick Ng, I held one for about 12 years (8 years as a rental) and probably did a little better than breakeven; sold it for $50k appreciation in 12 years (+ principal reduction). 

I think finding a partner to do some role plays using his principals would be a good idea to get my negotiating skills to the next level. 

For PMI, I figure 1% of the mortgage principal /12 to find your monthly PMI.