As a parent to do this for a child, it is only acceptable if the child has a documented disability which prevents them from being able to work/ earn income.if parent/borrower is in one state and the child is in another state, i don't think this is an issue.

I am looking to begin investing in real estate and trying to create some form of passive income for my family.

As long as the rental income covers your rehab and financing costs, you're good to go!

Hope this helps to understand how a lender looks at a rental property's income to be a self sufficient asset.

Do I have to claim the down payment as income since it was used to pay back a loan?

From most of the deals I have seen, a lot of people in Oregon are BRRRRing and can buy deals undervalued and rent them out with solid rental income. 

Depending how much you earn you can step up those savings by getting a side-hustle in any part of real estate....working for a top Real Estate office on weeknights and weekends, working for an RE Investor, working for a General Contractor and learning a few skills, etc.

What’s the typical income in the area?

I have a prospective tenant that filled out an application.However I need some advice on qualifying this individual.The current rent is 3600The applicant is a family The Spouse doesnt work The main applicant gross W2 income is around $10000 monthThe monthly net income is $5700No car loan's No credit cards balancesThey pay $800 month on a personal loan.Since a rent check is written after net income is received.

Let's chat about what is your net income?