The programs are always changing.      

There are programs that take owner occupied before investors, or offer to owner occupied for a set time before opening to everyone. 

Maurice Colbert - Sell the home to get the tax credit Robert Ellis mentioned (any profit is tax free) then invest the cash in your choice of diversified stocks (I like MO - Altria / Marlboro which pays a 4-5% dividend and has appreciated 10-15% each year over the past 5 years) using a low cost provider like Scottrade and its free dividend reinvestment program.

HUD will offer $100 down program on FHA loans occasionally and in targeted areasThe program is for FHA loans and owner occupants only 

It's $6500 to buy into that program, then 4.5% points on every deal and 15% down.Pros to LOC:- Access to funds immediately, can buy 4 or more projects by the time the 2 above get done.Cons:- large upfront cost- with 15% down on every deal, cash will start to get tight until I refinance all of themShould I be patient and wait for A and B to start rolling - or buy into the LOC????

If you are looking for a buy and hold, consider a first time home buyer program for your state.

@Jeff Dulla - Is this the HELP program?  

I plan on purchasing it with an FHA 3.5% down with a down payment assistance program for a rate of 4.5% APR to have a mortgage roughly about $1,000.

Most require 25% down, but there are some really good niche programs out there nowadays. 

Most portfolio lending programs that I have run across will only refi 65-75% of FMV as determined by an appraisal.