I know you're not keen on refinancing since you don't want to lose your current rate and you're likely not at the 80% LTV mark, but this path would free up your options and enable you to acquire another multi-family home sooner than saving up 15% down for HomeReady.Also, your current FHA rate of 3.750% will come with life of loan mortgage insurance of .850%. 

People in that market aren’t keen to renting.

I have one more question- my husband is keen on renting out the unit even if it means losing money (I.e. renting below the $2100 threshold, which may have to happen).

however as I stated they are not keen on pass through escrows  so just put your money in first then close and resell.. that's how the locals do it. or get an assignement fee out of escrow.

I know around here you can't, maybe NYC area is different because of property prices..Personally, I'm not keen on a rental in that market.

I appreciate your keen insight as I'm still pretty new to real estate and working on my first deal.

Not really keen on doing complete gut jobs.

I'm thinking of just installing a private meter and prorating the electric bill but I'm not keen on dropping by each month to read it. 

I'm not too keen on the seller staying for 2 years. 

Definitely keen to connect when I'm there!