With the market tightening, it is my understanding fannie/freddie are checking on this more closely than ever.

I think you would be further ahead by using money from anywhere else you can, and have the IRA be part of your reserves- the bank want to see that you have 6 months PITI on any and all loans you have, they will count the money in the IRA (less the tax and penalty) but at least you don't have to use it.We have tightened our belts and are putting everything possible toward another purchase.  

I think you're down to an average of a 6 month supply of homes on the market there which means supply is tightening up and the market is strong.It should be a great place to pursue any type or strategy in real estate you desire while you get started!

You may not have much for cashflow left, but you will have the loan paid down, and you wont have a strained relationship with your family.      

Dollar.Overseas investors own over half of the marketable U.S. government debt, and with the falling value of the dollar, dollar investors are looking for a higher risk adjusted rate of return.As Brazil, Russia, China and India Grow at their current economic pace, the supply of commodities tightens up, and the cost continues to rise for wheat, corn, oil, gold, silver…the list goes on.Our Medicare hospital insurance trust fund is predicted to be depleted in 2020.

Yes lending conditions are tightening up, which is why a great relationship with a lender is a must.

If you decide to keep this tenant I would suggest you tighten up your lease (address some of the issues that have occurred) and have them sign a new one.

Individual states may further tighten the requirements as they see fit, but may not loosen them beyond that which is allowed by this specific federal law.  

Did you tighten it down enough??

The owner has a relationship with the bank, albeit strained.