I heard that you can pay each child up to $12500.00 annually but not sure how exactly it works!

I don't remember seeing someone smoke in their house since I was a child, but I'm only familiar with the west coast.

After few years you will realize that few problem child you can't handle.

Having a personal loan in your name, that should be under a business, could jeopardize you from getting a car loan, a student loan for your child, even another home. 

I am stretched past capacity as a full-time working single mom to a young child.

They mostly happened to be convicts, hookers, addicts and child molesters.

Assuming the cousin is an only child they own 100% of the property legally by probate law and can sell it.

I would stay away from there unless you have a child going to school there.  

Either crime areas or child molesters near by :( Is something I have to keep in mind because we are on our own.

There are a few areas (like much of California) that have income discrimination laws that do not cover vouchers, just other forms of income that are commonly discriminated against (like child support, fixed incomes such as Social Security, etc.).