Applying @Brandon Turner's 50% rule of income/month for expenses, they would be $1200 / month.

Does rules maybe just apply to make a very fast draft.

Yes, it's a complicated application process whereby you apply for the LIHTC prior to construction.  

We're taking our profit and putting it into a bathroom remodel and then will start applying it towards principal.  

You have to tie it to an index like a T-bill or the prime rate in the beginning.That’s probably going to affect all but three to five percent of individuals who carry back notes.Remember that these restrictions only apply to seller-carryback transactions on propertiesthat have a dwelling that the buyer will use as their primary residence.

If the first person applied first and qualifies nicely, go with that person.  

My advice to my past self, too often I have not followed real estate advice or rules-of-thumb because "that advice doesn't apply to my situation" or "it will be different for me because _____".The reality is, the rules of thumb DID apply to me and I would have been better off to heed the advice I had been given.Good luck to you! 

Will our consideration and amount increase if we wait to apply for it after reducing our debt load some or does it mostly depend on the value of our home vs what is owed?

The 1% does not always apply in Canada like it does in the states, In Ontario anything I have seen in my market following the 1% rule is actually a bad investment because they are usually in towns with negative to no growth.

With that said for a quick filter analysis I am applying the 50% rule.