Verify with your CPA and attorney. 

No one from FHA will come and knock on your door to verify you're there a certain amount of time so just be honest with the application and it things should be fine.

My friend is a banker and verified they could do this up to 70% LTV at 20 years fixed even with non-warrantable. 

Your husband should report all verifiable business related expenses on Schedule C. 

Of course I verified as best I could that the property value is more than the note:).

I don't know of any way to verify he isn't playing games if he is smart about it. 

I at the time had a credit score I wasn’t proud of but still got a refi because I was only asking for 60-70% if it’s new arv which was verified via a new appraisal.

Option two would be to have items repaired by licensed contractors to acceptable construction standards verified by an inspector of your choice after work completed and before settlement is done.

Even then if it looks good you can put in an offer but then have to do your due diligence to verify all your numbers are right and if not you may have to back out. 

Textbook responses:Me: Is there still a mortgage on the propertyHim: Yes about $67k (comps put house at $93k)Me: How soon are you looking at moving on the saleHim: YesterdayMe: Do you want to get any money from the propertyHim: No I just want it goneMe: Will you sell for what you oweHim: Yes, but I don't want to pay anything out of my pocketMe: Are you willing to sign documents giving me the right to verify the amount you oweHim: YesMe: There are many ways my investors can buy your house, are you open to creative ways other than cashHim: As long as I don't have to pay that note.