Any tips on this?

@Oli CimetI would be careful about house hacking in Oakland and if you're looking at $550k for a SFH in Oakland, it's probably not going to be the safest neighborhood.

PS: If you have any tips for resources where I can learn more about this, that'd be helpful, too!

I can totally appreciate what @Keith Leckey @Austin Mountain have described regarding their personal experiences and the fact that the three of us have given you very lengthy responses to the realities of Section 8 should tell you alone the complexities that you will no doubt be dealing with if you care to enter into the program.  

No need to test just be careful with it (don't eat, wear respirators, clean up thoroughly, have drop cloths/paper down, and disclose it to buyers). 

The creditor could object if they are not taken care of in the plan according to their filed proof of claim (They filed an accounting with the court stating what is owed).

@Joe Mills be extremely careful on the values of the homes in the total value.

In CA virtually everyone who has lost money in CA RE did so because they were forced to sell usually due to being over extended.  

Be very, very careful.

We are just trying to save the huge interest rates of a loan - she is negative $8k a month with all the special care