Talk to your CPA and set aside any funds you may need for taxes.Given that you will have zero cash flow over the next 12 months, there is extra burden on you to ensure you are smart with the money and keep reserves in the event there is a problem (e.g.

Bad tenants are very expensive and this is not the business to be in with little to no reserves.

Kindly confirm if you are in agreement with the above repayment statements before we can proceed any further.If someone has experience with a loan like this, please let me know what you think about this whether it's a good idea or not for being our first rental property.

It is 20% down, some money in reserve, 5.8% interest rate.Does anyone have familiarity with this type mortgage? 

There are so many things you need to know about the plots of land you would be targeting - are they leveled, foundation options, water tables, access to public water and sewer - and that's all before you confirm the right prefab and also confirm that there are local builders who can do the foundation work and then assemble and connect.

HOA has a good amount in reserves, hasn't had any special assessment fees and covers everything except gas and electric which is pretty attractive for future tenants. 

The key of course (as you observe in the OP) is to have sufficient reserves to weather the storms. 

The latest version (ERAP) requires the Landlord and Tenant to participate, which enables you to confirm she has actually applied and lets you track the progress of her claim.

If they reply in the affirmative you now have  written confirmation. 

My gut tells me to use the cash flow from the property to start building a bigger reserve fund and just use personal funds to pay for the HELOC but open to suggestions or what you have personally done!