Since it is outside of the house it's probably not as much of a risk to anyone living there, but that does not mean that there is NO risk. 

well  before you work with Jack you should treat him like a tenant..pull a credit report and run him through a criminal and general background check.if he balks you have your answer.it always amazes me that folks will jump into these large partnerships with a ton of risk and not even do the basic background on the partner.but rent some 12 dollar an hour person your rental and you would never do it without doing the above.now most folks will jump on here and say brilliant things like RUN  LOLbut lets be pragmatic here and just check the guy out first.. then when you have that info.. go from there.Also be careful on how you deal with the bank you don't want to put in a fraudulent application..

Additional risks?

Also even if a tenant knew about the program (most don't) and was able to sneak it by you (which it would take a lot of chutzpah to try) they would be in violation of the lease and could risk eviction and would almost certainly lose the portion of their security deposit required to cover the utilities.

I just came across this article from Calculated Risk (the article is about a year old so here is the latest data.) which suggests that MF demand will start to shrink due to increased supply from new building and decreased demand from those aged 25-39, who will make up the top three age brackets in 2020, who will enter their prime home buying years. 

I didn't inquire into the details, but it would be my guess (given that particular state) that the owner was also sued.In my case, one of the reasons I have a property manager is risk mitigation (beyond wanting nothing to do with the day to day hand holding of tenants).

Seems that my only risk would be unrecorded liens or problems before 1988 which seem unlikely especially considering the state took over ownership a year ago.  

@Elizabeth Wilson  its far to early in the process.. having done this for many years before it became ILLEGAL in our state the only way we bought them was within 48 hours of the auction and usually the day before.you need big time cash and big time risk and you need to have in at title company that will give you a date down on the phone.. if your in a title abstract state that takes for ever to run title I don't see this as any kind of viable.

The resolution calls on the city manager to launch an educational campaign including:Best practices regarding educational and marketing campaign strategiesOutreach activities in areas where populations at risk are being targetedPotentially include a hotline to refer homeowners to a “Real Estate Agent List” and a list of legal resourcesA campaign work plan that includes a timeline for implementation and identification of both public and private funding options and potential partnerships

Illegal.... well.... don't buy one of those:)   Having a good grasp on this is imperative for the success of your investments so you understand your risks , downside ,upside etc.