now if you could get a seller to be the bank I get that you could smoke and mirror those deals.. but i would think those would be picked over low value or properties in the worst areas of town etc..   

The program was created to give low-income tenants an alternative to living in federal project housing.S8 sets their rental rates to the LOW-END of market averages, if not slightly below.

It allows you to take advantage of a low down payment loan.

Low vacancy rates, rising rents, and high tenant demand for more space/good school districts. 

Quote from @Jaycee Greene: Assuming you pay asking price, I'd estimate the down payment for something like that using a hard money loan (HML) would be around 40% of the purchase price and your monthly payment would be $2,600 with an interest rate in the low 7% range (probably need a 700+ credit score to get that).

As you grow your portfolio, keep an eye out for lenders who offer low down payment options for investors or those that allow leveraging the equity from your existing properties to fund new ones. 

Here is some key information:Property recently hit the market and has 2 cash offers alreadyThe seller provided a pre-inspection report, which I shared with 2 different lenders, both think it may fail conventional financing due to potential structural and electrical issues (realtor thinks it could pass conventional)Seller has 100% equity but is behind on other payments (not sure of the urgency money is needed)This is my first attempt at an “investment” property so I’m new to thisI see 3 optionsMove forward with an offer using conventional loan pre-qualification-Not as attractive of an offer to the seller-Possibility that appraiser calls out structural/electrical issues that need to be fixed before closing, effectively causing financing to fail- Best terms and fewest loan fees for meUse a rehab style loan such as ChoiceRenovation-Even less attractive than a conventional offer to seller, but less risk of failed financing if appraiser calls out issues-Slightly worse fees and interest rates compared to conventional-Lenders tell me possibly up to 60-90 days closing in some cases, with red-tape for contractor requirements and draw schedules (sounds like the most hoops to jump through during rehab)Use a hard money lender-Most attractive loan option I can give to seller so I can compete-Much higher fees and interest rate for me-need to refinance into a conventional at the end of rehab (not familiar with seasoning periods but I think this is a factor as well)Which option would you do?

Rents are generally low there as well, but definitely stable.

If my target would be low income residents, are there any grants, tax credits, or funds available to help me with the conversion? 

Prices are low and they hit the bottom during the real estate crash.