The 100 mile rule that Chris mentions is true also so you'd need to meet both in order to use rental income to qualify however, if you have "enough," income to qualify for both homes with out "rental income," then you can avoid these pesky guidelines.Below are reminders of several sections of FHA Handbook 4000.1 that apply to the “FHA 100 mile rule” Departure Residence Rental Income: Using rental income from a property being vacated by the borrower: If rental Income is being derived from the Property being vacated by the Borrower, the Borrower must be relocating to an area more than 100 miles from the Borrower’s current Principal Residence.Multiple FHA loans: A Borrower may be eligible to obtain another FHA-insured Mortgage without being required to sell an existing Property covered by an FHA– insured Mortgage if the Borrower is: Relocating or has relocated for an employment-related reason; andEstablishing or has established a new Principal Residence in an area more than 100 miles from the Borrower’s current Principal Residence.Military Personnel / Occupancy: The Lender must obtain a copy of the Borrower’s military orders evidencing the Borrower’s Active Duty status and that the duty station is more than 100 miles from the subject property.

@Matthew Hamilton, just to clarify, are you saying that your lender is not aware of the one-year owner occupancy requirement for FHA loans?

(do you really want to waist your money on people who don't have equity or moved in just a few years ago or even worse...last year)3. what are the ages of the home occupants? 

Lastly, I would definitely first try talking to your HOA about some kind of hotel use for the condo occupants.

If you have a lower budget I would do niche lists(tax delinquent/probate/mortgage rates) If you have a bigger budget I would do owner occupant over the age of 55 with 60 percent equity, SFH.

Or, barring an accurate projection on that end, 6 months of gross rents assuming 100% occupancy.  

Suppose the occupants won't leave when you sell the house?

If it doesn't sell, you've got the occupants to deal with and then selling costs - if the value is 60k, you're probably looking at around 40k or under as the price it'll sell at because folks expect a discount for distressed properties, especially in this price range.

The tenant/occupant may forward it to the trustee but there's no guarantee.

You may be better off marketing this to a contractor owner occupant as a lease option giving credits for $ they put in toward purchase.