During the recession, 3/4 of them were layed off and I started taking on commuters.Most commuters only lasted 12 months tops. 

After all during the recession the highest rates of unemployment were at the lower income and education levels.

Will tenants have to commute further during a recession and eventually move somewhere closer to work?

We added recess lighting, got the laundry inside the house, converted the extra room into a gym and also painted the whole house including the tiles in the bathroom (since me and my girlfriend were experts in painting from all the experience we had from the back house).

The economy and home prices tanker there is the last recession, due to it being focused so much on recreation and vacation homes.

Just make sure you do your hometwork on the employment trends, recession data, regional growth, etc. 

Assuming it is a purchase mortgage, your lender is correct.The disconnect is probably from reading about refinances and/or old pre-recession info and/or reading that you can roll some of the closing costs into a higher interest rate (but not loan amount).

However, all of them come with risk. ( especially if a severe recession hits).

In 2009: The recession hit us hard in 2008 and I found that my old home which I had lived in Chandler was now quoting for about 12-14% lower than what I had bought it for.

The property values range between $250k-$320k.Most of our tenants in the LTO program are families that were hit by the recession and haven't bounced back financially in terms of qualifying for a non-conventional loan.