However, the buyer is using FHA backed financing, and FHA does not allow the pressure treated wood to touch ground (even though it is rated for such) but instead I have to dig a 4 in ditch around the foundation and fill it in with gravel.

All in all, reading everything you wrote, im thinking i might just have to dig a little deeper for cheaper properties in nicer neighborhoods (as well as the rest of the RE world).  

There are not many that do both, so you'll have to dig a little. 

And my father went into the hospital and was going to need a new place to live and i thought the lower unit, but it had a stand up shower ans he needs a tub, so dig a litter deeper int the bathroom and find mold and water damage.

The sand I saved to bed in the water line .Second was to dig a 4 ft deep trench from the house to the well head  This was 80 feet long , had to go under 1 sidewalk and move stone out of driveway to be reused .Third  was to lay in the water line and electrical conduit . ( I could have just layed the wire in the trench but  I prefer conduit )  And then hook into the old well line .  

To dig a bit deeper, is there anything that let's you store things for repairs such as paint codes, maintenance man info, etc.?

You are right to carefully consider and perhaps dig a little deeper.  

I am looking in the Kingston/saugerties areas, but they are hot:   hard to find deals, just have to dig a little more.

So, now I am starting to think that this is not a traditional loan, but rather one that can be adjusted like a reverse mortgage where the lender is paying HER.Time to dig a little deeper....

In today's ultra crowded and competitive market, those that dig a little deeper are the ones having the most success.