But the kicker is that the house has a market value of closer to $750,000 - $800,000.  

Mortgage fraud laws are divided into two specific categories, which are:Fraud for housing, in which someone submits inaccurate information in order to be able to buy a home under more favorable termsFraud for profit, in which a real estate professional falsifies information so that they can get more money out of a transaction"most states also have their own laws in place.

Adding additional assets, a familiar market, buying a house "for free" as I call it, and gaining experience with lower level of risk How did you find this deal and how did you negotiate it?

MatthiasGreater Salisbury Maryland Area*Primary in purpose but certainly made into another income stream, seasonal STR or as a house hack.

It's a 3/2 , 1,680sqft house in Braselton with a finished basement (2 bedrooms, den) and a recently converted garage.

I have a brand new house with a year of builder warranty, and so full property management might be overkill at this point.

Would it be smart for us save 10% to 15% percent for our new primary, then rent out this house.

I think they don't like the idea of Johnny the wholesaler convincing grandma to sell her house for $150K (when it's really worth $300k), and then turning around and selling the contract for it to make an obscene amount of money relative to the work performed, all at grandma's expense.

I recommend you print, study, and highlight the HUD guide: https://www.hud.gov/sites/dfiles/PA/documents/HUDAsstAnimalN...You should also check with a local HUD office to see if they have any additional guidance they can provide you.Keep in mind, not everyone is subject to Fair Housing requirements and you may be exempt from allowing the ESA! 

However it seems that things are changing, even if housing prices settle out in the coming months and years, they still are and still will be at record breaking highs, which has left my generations purchasing power significantly lower than any others.