If a bubble does form and subsequently collapse I would bet that it will be the new investors and homeowners that get hurt and not the hedge funds.

I have found myself in a predicament with the current market and subsequently I am interested in long-term real estate investment.

However, because it was only ever a temporary use, and the zoning subsequently changed to no longer allow two families, the temporary use is not "grandfathered." 

I believe that these funding sources put restraints on who can be tenants but unsure of other pitfalls.We are also looking into multiple sources to cover housing/historic/low-income community/small business/micro-enterprise/rural area/anything else to off set some costs.

(With this achieved, my husband and I can subsequently plan to have a baby and spend time with him/her, without much financial stress.)  

An enterprising and very patient squatter could possibly acquire some of this land via the statute of frauds. 

Since many flippers sell to buyers who will be getting FHA conforming mortgages, this affects them.Banks want to issue FHA conforming loans because this allows them to sell those loans to FANNIE MAE and FREDDIE MAC, government enterprises that buy mortgages.  

On my mortgages, I want to best terms and lowest cost since I expect to hold them long term and they impact subsequent borrowing DTI calculations.

Where does one cross the line from what is considered free enterprise and the essence of capitalism to what is outright intent to defraud???

Basic facts are that property purchaser bought a condominium unit that subsequently fell into litigation over the validity of an old deed of trust on the unit.