Keep in mind that many of these cheap homes are selling for less than a third of their insurance replacement value, which really means that the land has negative value - let that sink in.Most buyers who can actually qualify for a mortgage will get a PA for $200-300k and desperately want to upgrade their life.

Now keep in mind nothing in RE is for sure..

This used to be a non-issue for FHA buyers up until 10 years ago when HUD stop allowing buyers to use their appraisalsKeep in mind your agent is not dealing with HUD directly. 

You can find different strategies on how to find and reach these folks, such as driving for dollars, targeting mailing lists, networking with Realtors and other wholesalers, and having an online presence, plus paid social media ads, etc.

Mind your own business - the house - send these people packing and give it to your insurance company.  

Even though I myself have a S8 rental, what you hear online is completely false.

Keep in mind that rates does not fully translate everything.

Check out the free content online of Bill Faeth. 

Possibly as an incentive you cover anything over a certain amount to give peace of mind to the renters.

And it would blow your mind the massive demand for there service.