If you don't then i think you might look for alternative option which does not involve using (TAHX) Program cause this criteria will be evaluated.

Also, an alternative offer to the seller is her full asking price of $322,000 but at a 3.5 (or lower--how much lower?)

OK seriously...Let me just show you something :And a few leads from a few days ago.This obviously does not include all the phone calls we are getting, nor the alternative ways people contact us after seeing our website...Do you know how much I spent for these leads?

Or, alternatively, to get out of the PMI after a few years? 

Alternatively, you can go with a portfolio lender and get a refi with the same LTV % as conventional, immediately after fixing up the property and placing a tenant.

Our lender told me it's 10 total, and a smaller local lender said they can only do four, so for us primary plus nine investment properties seems like the max available until I find an alternative.

It will be a major job; but it likely won't fetch a price you want in it's current condition so you need to explore some alternatives.

Alternatively, you can use your own funds to purchase/rehab (Cash, Heloc, etc.) and then use a private lender on the back end to be the bank after the property is stabilized.

Do the collective experience and intelligence of this community have any creative suggestions or alternatives to suggest?

I told her I would personally drive down there if she wanted and dump the neighbors plants onto their patio for retaliation, just let me know if you want me to do that ... but she declined :(Alternatively, do you want to stay local in nova, self manage 1-2 rental townhouses at 400K each and thats the end goal for your portfolio.