Simply gifting him half the property now wouldn’t immediately allow him to claim the exclusion without fulfilling this residency requirement, I don't believe.One thought would be to use a HELOC to pull just enough equity out of the current home and use it to buy a smaller home, or at least the down payment.

Instead of a traditional down payment, I would give them some money (maybe just to bring the loan back to even).The upside if taken over the loan at the current balance, with some rehab and hopefully getting the front lot back would be a nice ROI. 

I now am more selective about loan officers as well as lenders. 

Have a list prepared around a nice area of houses that you have selected that will fit your criteria....maybe see the insides of one or two?

Rearrange photos, change payment from one to two payments, etc. 

For the property I purchase, I’d like to keep my monthly mortgage payments at $2,000 or less.I prefer a turn-key property since this is my first rental, and I want to start generating monthly cash flow immediately without the delay of repairs or managing two mortgages.

You could structure the deal as an installment sale or a lease option so the property owner doesn't see a large capital gain tax payment for the sale.And good on you for helping out!

Firstly, we have to grudgingly agree with William that 30% down payment was onerous.

@Peter Mckernan Copy.... it's a "% based payment" off scope of work. 

Ability to repay - can you as the borrower afford the payments based on the loan amount.Typically they will not take into consideration the mortgage on a new property that has not been taken out as that is new.