Gave him 10 months free space rent and paid for all his utility hookups. 

The first apartments I rented as the owner, were previously rented by the former owner at $150 month including utilities. 

Alternatively, once you have a full time job (or an employment contract), you should be able to qualify for a loan and utilize a Down Payment Assistance program.

Several have mentioned utilizing low down payment second home loans for qualifying.

They were fine with my score (about 740), but have issue with the percentage of personal credit I am utilizing, so that discussion also petered out.Apparently, I have a lending profile right now, that is not attractive to mainstream lending programs.Any advice?

Need more information surrounding why your current lender is suggesting they cannot utilize the rental income on your investment property.

Also, be sure to check with the section 8 agency managing the tenants - sometimes if you pass on an additional cost like that they will no longer be eligible to live there if the rent and utilities exceed what they were approved for.

I can only speak regarding structuring the deal as I have not utilized partners personally but it really can be anything that you want.

.$8,981 mortgage at 7%$2,918 expenses monthly 33.38% of Gross rental income (Prop mgt, maintenance reserve, utilities, Prop Taxes, Insurance, other)$6,852 NOI/monthly ($2,129) negative monthly cash flow..Same scenario with 50% down, $864 positive monthly cash flowNot saying it's the best use of capital or the only way to do it, instead providing an example using an available market opportunity to share what the numbers look like. 

There's a few different ways to focus on a lower rate such as with house hacking and making the investment your primary residence, requesting a significant closing credit from the sellers for standard rate buy-downs (which I've had great success with recently), or utilizing lenders who offer short term rate lowering solutions such as 2-1 rate buy downs (again, ideally paid for by the sellers).