You should register the rental unit with the Rent Arbitration Program right away as well.

Before going forward, read your contract, there should be some arbitration clause there, and the following advice is not legal but only based on knowledge of being a contractor. 

The review board agreed to lower the value a bit more but agreed with allegations by appraisal district that my purchase was not “an arms length transaction”I purchased the home as anyone could have and had no prior relationship with seller, HUD.I have on a number of occasions gotten values reduced with a recent sale price as evidence.I’m thinking of going to arbitration or district court.

In general, the requirements for payment from the Consumer Recovery Account include obtaining a final civil judgment or arbitration award, or a criminal restitution order against a licensee.

We though are 50/50 and basically agreed that if we couldn't agree then we would go to an arbitrator.

I have a blog on my website about mandatory arbitration when there is a redemption request.

If they sue you and it goes to arbitration the court  will ask you to negotiate the price anyway.  

I suggest you stay away from arbitration agreements and have hold harmless, indemnification agreements that are balanced.

I’m currently in the middle a civil suit I have with a multinational financial company in NY and awaiting arbitration.

The parties further intend that this Agreement constitutes thecomplete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial or arbitration proceeding involving this Agreement10.