These bonds can be made up of agency (Fannie/Freddie) mortgages or non-qualified mortgage backed securities. 

Of course, this is non-legal advice. :-)   I recall anecdotally this being pursued as a pedofile/recording children in their bathing suits thing ... 

I do have money for the down payment. 

Lot Size 350m2Lot Price: $30,000Construction: $100,00020% Down Payment and 48 months; 0 interest.We are looking at getting our first Short Term Rental in Tulum Mexico. 

My payment is $1000 with around $300 to tax and insurance.

Should I be expecting to place a down payment of 40% or more?

  - To get full tax deferral, you have to move all of your equity over into the new properties as down payment

Because you are living rent-free, have no housing payment, and no management history, and are buying this as an investment, you will not be able to count rental income to help you qualify, unfortunately. 

We’ve gone through the process of doing an application and submitting the required documents, and our lender is saying our combined income is too low, even with a significant down payment. 

If you structure the deal where you are a non-managing member or limited partner with no say in operations, you will be deemed passive and your income will be passive income.