# First attempt, right after setting up sftp and changing the home dir to being owned by the user:
seismicmike@seismicmike-laptop:~$ ssh testuser@10.0.0.2
testuser@10.0.0.2's password:
Connection to 10.0.0.2 closed by remote host.
Connection to 10.0.0.2 closed.

# Here's the /var/log/secure for that connection attempt:
Feb 10 08:36:00 localhost sshd[1183]: pam_unix(sshd:session): session opened for user testuser by (uid=0)
Feb 10 08:36:00 localhost sshd[1185]: fatal: bad ownership or modes for chroot directory "/home/testuser"
Feb 10 08:36:00 localhost sshd[1183]: pam_unix(sshd:session): session closed for user testuser

# so I change the ownership back to root and tryagain:
seismicmike@seismicmike-laptop:~$ !!
ssh testuser@10.0.0.2
testuser@10.0.0.2's password:

# after a very long wait:
Connection to 10.0.0.2 closed.
seismicmike@seismicmike-laptop:~$