So you just want it to have a home directory outside of /home ?
You can use the -d option of useradd to specify an alternative home location.
As for "it can only access its home folder" you need to be more specific than that. Programs may have trouble running if they don't have access to /tmp, /proc, or /dev.
EDIT: if you don't want your user to execute programs, just have read access to some files, you might be better off sharing your data over https (possibly with webdav if you need read-write). This way you don't need to create a unix user.
You could go with FTP but it is not secure unless obscure security extensions are used. At the very least you can configure SSH so that the user is only allowed to run the sftp server. All these options are quite less troublesome than setting up a chroot jail.