What you're trying to do is technically a "security" by definition of the SEC and they regulate it. 

So many abandoned buildings because the projects could not handle the city regulations and project meeting needs.

We were prepared to stop the closing, walk away and report them to all the proper commissions that govern their industry. 

Do OSHA regulations apply?

I understand that creating a fund is expensive (mid 5 figures) and subject to SEC regulation.

See this link:http://www.nolo.com/legal-encyclopedia/free-books/renters-rights-book/chapter1-2.htmlAnd there are some small municipalities that are starting to impose regulations on landlords regarding illegal aliens:http://campbelllawobserver.com/2012/08/rent-to-illegal-aliens-landlord-you-may-be-penalized/

I know city's/OSHA are involved to limited extents, but nothing like certifying an aircraft design to Federal regulations (FAA), or auto (SAE)…..so the RE industry just does not have as many designers/engineers that have been subject to advanced technology or design criteria.

It's BASIC real estate issues and transactions and RE financing rules, programs and regulations you need to concentrate on, not schemes.

despicable...Only cities with BIG GOVERNMENT require a landlord license.

He will have to go through a process to get reimbursed from the government which is never fun.