The low money down and better owner occupant interest rates can't be beat. 

This would allow people to house hack and put a very low down payment on SFH and MFH.

I've invested in/renovated a number of single family properties in the suburbs of Philadelphia (Mainline), with values ranging from $400k-$1.3m and decided to tackle a significantly larger project 6 months ago; comps were incredible with high sale prices and very low days-on-market, it looked like a home run.The loan is under an LLC but with a personal guarantee; the renovations are complete and the house is beautiful, but the market has been unbelievably slow compared to the previous 3 years, on which our financials were based. 

If this is a single family...you should have 1 month vacant every 3 years or so.Your interest seems low, but maybe thats because you are paying points.

Unless I 1031 the property I sell of course but this wouldn't apply to a long-term rental. 1031 exchanges do not exclude rental income from taxes. 1031 exchanges defer the capital gains and depreciation recapture taxes  generated from the sale of the property. 1031 exchanges absolutely apply to a long-term rentals. 

Also for the cap rate question you asked, I wont tell you what kind of investments to make, but I personally would not take low/no cash flow property on the hopes it will appreciate.

I would absolutely not accept a quit claim deed and take on the liability of owning a property if I didn't know the IRS would do an acceptable deal. 

@Kevin Polite I absolutely agree about appreciation.

Are there special financing sources that could make it worthwhile to set aside some of the residential units for low income housing or put solar on the rooftops or . . . ?

I might have an investor that will go as low as 600 on that as well?