No one is fooled, no one thinks the loopholes or cagey language is clever.   

@Greg Scott My concern is that a small percentage of landlords will illegally intimidate (turn off power for instance, not repair things) tenants into leaving, exploit loopholes (just do a major remodel/rehab as excuse to remove tenants) and/or other bad acts that will give "advocates" an excuse to label all landlords as oppressive and argue for more regulations.

That doesn't mean that there is some kind of magic loophole and that the child will suddenly never have to effectively pay rent again simply because "he has a lease".Obviously consult your own professionals, but if the "lease" is broken at the time of foreclosure, then these people have periodic tenancy and a simple 30 day notice to vacate would suffice. 

Co host is a loop hole because the money goes to the owners bank account not yours.

I was amazed to find out this information but I put my own foot in my mouth for not believing that it could be possible.It is kind of like rules and regulations there are all ways loop holes that void the rule itself and take upon another situation.

I'm always confused by how this idea seems to have been perpetuated that there is somehow some kind of loophole where you can give away money, but then by writing things off on your taxes you can end up coming out ahead. 

Or is there some loophole I am missing with this offer?

I don't know if my train of thought makes any sense to you or not, I'm just trying to see if there is a loophole in this system to rob peter to pay paul.

Is there any loopholes in an FHA? 

Like how much down payment is needed and if there any loopholes for low down payments