I find condos/townhomes to be easier to manage out of state because the HOA handles a lot of the maintenance, just be aware of condo fees and find a place that is reasonable like $300-400/mo or less if you are lucky.

The fact they ask you to do this is not only a red flag for obvious reasons, but also because, they should know better how risky this is for you and if they had true good intentions they would have understood that and not offer you that option.What you can do is tell them..

Is this true? 

True, but that doesn't mean the other people there aren't worth meeting. 

Rodrigues' recommendation may change this), but my next question would be, are there any cities/markets where 1 of the following are true: 1) You have family/friends that live there, 2) You travel there frequently (either for vacation, work, etc.), or 3) Somewhere else you've lived before AND know the area well?

This would probably allow me to qualify for the FHA loan if this is true since the giant loss is throwing off my DTI. 

@Matt Weddon - make sure all reasoning & communication around the rejection stays clear of all federal AND state protected classes under Fair Housing.

Is this true?

This may be controversial, but "true passive income" in my opinion is one thing and one thing only.

It is lakefront so that is an important reason.