Half a year later, here I am introducing myself to you all after having read more books than my previous fifteen years put together and devouring every resource I can find, including no less than half of the BP podcasts (almost all played at 1.5x speed; thanks for that epic Quick Tip @Joshua Dorkin and @Brandon Turner).

Under normal situation most investors would factor in 10% of rent for each category, but where should one adjust to in this situation?

I know they will grasp the concept of an app easier, than my tenants that I currently receive cash payments from who are not quite up to speed.  

Sadly, it is FHA loan so stuck with it throughout the loan regardless of amount of equity in the property from my understanding (although they recently change the FHA rates so think I can get a slight adjustment)3.)

The max LTV is 50% (chose between a fixed rate or adjustable) as long as it is free and clear.

From my experience ARMs typically adjust annually or semiannually so you get a fixed rate (often lower than 15 or 30 fixed) for that period of time.

Also, if you have made any payments from when this process started, the loan should adjust on the final paperwork.

Unfortunate situation but it sounds like you already know what kind of adjustments you need to do in your lease and screening applicants for the future. 

Alternatively, if you are not accredited but have resources or skills and time to bring to the equation, you can get up to speed and then approach partners that have what you might not have (skills, experience, cash, etc) and fill their need.  

I'll have to see what happens and adjust it!