I am planning on denying their application for many reasons.

Unless you have a bank/mortgage person (and more importantly the underwriter) "playing ball" they might see what you're doing and deny you the FHA loan, since you have likely no intention of living in your MFH.

They could always find grounds in their fine print to deny your claim.  

Sean responded very arrogantly and denied payment.

As mentioned, most of mine are smaller banks that use a loan committee, and they just meet and approval or deny loans in those meetings. 

Ofcorse it got denied due to the new wetland zoning of the lot.

If you get caught it will NOT end well for you, mortgage fraud is a big deal.Also, you don't want to abuse the system, if too many people do that we risk more restrictions on this wonderful benefit.If you have a spouse, they can live in it, that would satisfy the occupancy requirement.

They could potentially deny all claims you make and all those brought against you.6) What kind of professionals should I be working with to help me assess and repair the water damage in my unit?

Rent to own, Contract for Deed have been abused and in my experience more so then Subject To. 

It isn't "zero down".In the current climate, prosecutors get promoted for finding people who abuse mortgage law and take advantage of people.