When I look for my next property, I work on cleaning up credit, so my scores are as good as I can get them.  

I suspect the builder has crappy credit and can't get approved on their own.Also, as a former banker myself, local banks aren't generally interested in financing new construction on this size of project or a builder that doesn't have extensive experience in these type of builds, in my opinion. 

We're wondering about various what-if's though, such as what if the people tear up the place, what if we don't want to rent to someone in particular due to references or credit or pets, etc.

To do well, build a strong money base, keep a good credit score, and look at other loan types besides FHA.

As my wife and I were reviewing it, we saw a few things in the application and on the credit report that looked funny.

You only need a place to track tenant information, payment history, maintenance, etc.

The bank will want you to be working for a certain amount of time and that have certain credit score plus have your financial ratios match what they want. 

We have some credit card debt we are hyper focused on paying down , and 34K in my student loans (not touching currently due to SAVE plan with the zero percent interest).

They offer competitive terms and have a robust track record, but you may find their rates and points can vary based on the specifics of the deal.Roc Capital: They focus on fix-and-flip loans with favorable LTVs, and they’re known for quick underwriting.

You only need a place to track tenant information, payment history, maintenance, etc.