It requires no money upfront, so you will join thousands of others trying to do the same in your market.

If you ask the manager to justify a fee and he starts hemming and hawing, move on or require them to remove the fee.

I actually like them because the homeowners' association (HOA) usually covers most of the insurance, and there is very little maintenance required.

Will the title company put this property under our LLC name, and won’t be required to legally inform HUD/tax authorities. - will it influence property taxes once we move to conventional loan in 3 yrs? 

A lender is required to establish the ATR of a borrower when it will be their primary residence.

Depending on how it is done and what guarantees the government offers and requires of the released entities, interest rates could move slightly higher.

Conventional loans will require 12 months seasoning for cash out and are usually capped at 75% LTV 2.

I am looking at different loan options but to break even (not having to put any money of my own in the house after the initial down payment) the current down payment required is that much. 

I'm not sure if they still have the 2 year requirement on income if it's going to be your primary residence.

It requires hard work, strategy, and a willingness to take on projects others might overlook.