It is a win for me because not only do I stay on the property (don't have to move my family) but also can turn it into a profit at some point.ALL ADVICE is welcome on this question...I am a total newbie in hard money lending /borrowing and want to do what's best for my family and situation.

I’ve had people tell me to let the folks at our church know what I do in order to borrow money, but I don’t feel comfortable doing that either.

You don't want to borrow against the equity in that which is fine, but if you are working and have very little housing expenses because the house is paid for and no debt, you should be saving most of your income. 

At 80 percent I think I could borrow maybe 45k?

Your loans will limit your borrowing power.

Depending on the type of property, those that are 1-4 units would highly depend on you the borrower. 

I can see the lenders side they want to make sure these things are done instead of chasing after borrowers who don't pay and then they have to put force placed insurance on the property etc..  

This commission is paid by the lender, not the borrower, and is added into the rate. 

For example, interest-only payments for a 12-month term and then the entire principle balance is due in full.However, in your specific example, I personally haven’t seen too many private lenders excited about funding down payments (since it means a second lien position), or conventional lenders that will allow the down payment to be borrowed for that matter. 

In a best case scenario, even if I were to borrow a small enough amount to maybe break even for the first few years, the amount of money I would have to put down would make my Cash-on-cash return not even worth the investment.