Or rather my advice is "live there a year, work with the locals and government....then don't." ;)

If they use the California model, there would be a Housing Department in the State government. 

For that matter Sub2 is legal in all states, see the Hud1.See the federal form HUD1 line 203Understand the due on sale clause.  

An insurance policy is not a statue, although there are statues that governs them.

What are the local government fees?  

The government isn't going to take a pay cut.  

It is mortgage fraud to get a loan for a primary and rent it out, especially with a federally backed program!

Many co-ops in New York tend to have rules that are restrictive, sometimes governing whether you can rent the unit out at all.

If your argument is that you don't feel like subjecting yourself to overbearing licensure fees, general fees, more fees, etc from a governing body just to obtain a 'license', that's a different conversation...though I doubt you will find much sympathy in that regard either.Just do it, what do you have to lose?

Padlock cut, I have never had a seller not want to meet me at a house before and other than government (commissioner sales) I have never kicked up squatters before (they were not squatting but I am 99% sure there was a squatter living in there).