Just keep chipping away at those student loans and by the time you meet the 2 yr min work history it might be at 0 balance and your debt to income ratio will be in your favor.

An agent I spoke with about this house said they noticed some setttling issues, signs of water damage in the basement, paint chipping, and a back deck that might be possibly rotted.

Chipping and flaking paint, thats got to be taken care of.  

In my novice opinion, this is what needs to be done to the house:Mold inspection/eradication (water damage from leaking water heater in attic)HVAC neglect (possible mold)10 Fogged Windows (house has numerous large beautiful windows that have become opaque due to moisture)Pressure wash exteriorReplace Carpets (approximately 1500-2000 sq ft)Paint interior walls/sand and paint trimPlumbing hardware has all been removed/needs to be replacedPool filled with excessive amounts of leaves/debris (pump is running)Excessive amounts of trash throughout house yard and pool houseLive Oak growing onto roof (arborist needed)New Sod (currently all weeds)Pool Deck ResurfacingGarage Door Openers have been removedLarge golf ball sized chip on bottom of granite on islandresurface built-insExterminatorPatch holes/cracks in walls (about 10 fist sized holes)Many light fixtures missing (10 or so in closets and bathrooms)smoke alarms missingSo, part of me was disgusted and felt very guilty watching my buddy conduct a walk through via the internet.  

My Section 8 unit failed inspection with 45 items, some as small as chipped paint.

I heard about verizon chip etc ...I would need specifics. thanks

Buyer has X Days to perform tests and X additional days to provide seller written proof of the defects they want fixed. they have X additional Days to come to an agreement.If you have something in E where it says "Contractor friend to perform walk through at buyers discretion" or some such legal mumbo jumbo you would be fine.Going back, my responsibility as an agent is to my client and if my seller had an offer and we negotiated 10K EMD, and the buyer put a bunch of stuff down that they saw (paint this railing, switch this light cover, chip in paint on handrail) and they wanted 6K credit.

For a really good look, spend a few extra dollars and get a squared off stainless sink; something like thisI've heard of granite composites cracking and chipping after only a couple years. 

And some of them like blue chip, and expensive, RE markets. 

I don't remember the in's and out's of what FHA required on condition but I know small, usually easily fixed items like smoke detectors, chipping paint, misplaced downspouts are items that they will require.I would recommend getting a good idea of what they require and keep that in mind while looking.