You just have shifted your understanding of assets and liabilities and replanned your spending accordingly.Just a thought, cheers!

When I had a meeting with my CPA he went over many ways to break up the rentals threw the LLC into trusts with partnership between me and my wife to limit the liability with each propertie.

I have one liability that keeps me sane.

If he has capital you can put a subject 2 deal together, split the profits while having very little liability.  

Failure to disclose a secondary liability associated with the house is absolutely against the docs that you sign while getting the mortgage.Back to the OP, if there is a provision that states that investment houses cannot use gift funds and he attempts to season gift funds for 2 months to bypass this rule, this is mortgage fraud.Are you likely to get caught for either of these?  

It seems that this investor opened themselves to all kinds of liability and burned some bridges in the investing community.Is this acceptable behavior and would you post it on the internet?

They're asking for a contract that benefits another party and attaches liability to you.I would not encumber my property at the demand of another party unless I was properly compensated for it.

Again this would almost certainly cost someone their license as well as a huge civil liability.

., or any other Entity type, or just own it myself with liability insurance.What kind of programs are out there as far as lending for owner occupant properties.

Don't just follow the code to shield from liability.