I love how investors get "sold" on paying a lender continual interest is better than paying your tax once.

They will always know a good lender or two.

Also, you will assume the Basis in any real estate holdings which could have future capital gains implications.Pros.This is a great way to take over an existing loan subject to that would be really hard for the lender to claim due on sale default.

I was wondering if this was true/ if there is a lender that will accept Community second/DPA for the HomeStyle loan . 

I haven't explored this much but I think it would be an interesting strategy (this is assuming you don't need the cash for the next ~3-5 years minimum):Invest the whole amount in something like VTSAX or the S&P500 or whatever big blue chip stocks a lender likes and pull like half the amount out in a loan or some kind of line of credit.

Are there any lender recommendations? 

Do any of you know if a lender would loan to me, if I did rent my home out?

Any suggestions on lenders in the region?

I would suggest talking to Hard Money lenders.

Find your core-4: Realtor, Lender, GC, and PM.