So from what I've read online it appears in order to count rental income towards DTI for VA loan you need 2 yrs experience.

I remember reading a BP post about how to have a property transfer count as a sale without triggering all the normal excise taxes and such.  

Of course, you'll have to know your inputs, otherwise watch for GIGO.STR in city of Austin is heavily regulated and restricted - might want to get clear on those regulations before counting on that. 

As Lora said, there are too many negative experiences outlined on BiggerPockets to count, so it's great to hear that responsible tenants are still out there :) 

Do the cabinets and flooring count because they are an immaterial part of the "building Unit"?

Find a new lender, there is no "seasoning" requirement to count rental income assuming a traditional/vanilla tenant is in place on a standard lease (AirBnB and similar is a different animal).

BUT if its already foreclosed on the beginning of the sentence I wrote above counts--all those other debts are gone. 

Our personal home mortgage- mortgage is only in her name, but the bank counted my monthly $ contributions towards our qualifying income amount.

I understand it counts towards the down payment upon closing but does it need to stay in escrow or can the owner/seller just do whatever they want? 

It must be a 1-unit and cannot count any rental income from the subject property to qualify.