The best product they could offer me was a 5/5 ARM.

Pouring a liquid down the drain line doesn't really do much especially if the lines are clogged or blocked.. after snaking the lines try to use a product that will foam up and fill up the lines.... there's home remedies and store products that you can buy that will work.Lights flickering could be as simple as tightening the light in the socket.

I don't think that a non smoker would be happy living between them, and if they didn't care - I would question the quality of the tenant.

I'm no expert on borrowing, but maybe look into a different product like Fannie Home Ready or conventional with 2% more down.I became a seller-financing master because of what you're facing.

My primary hope is to find an area that attracts quality renters (pay on time, lower crime area, etc) and cash flows.

Check with your agent but he sold us a product through a company called FOREMOST. 

LOLAgree re: "hotel syndrome" and guests falsely conflating stars as indicators of quality/luxury vs. experience/expectation.  

Have you looked at where you are going to live with your family, and how much is the rent at those places vs the mortgage you are paying now, does the quality of life affect your family in a way that creates any strain? 

How is it that standing behind your word and product with other assets and corporate backing is worse than a shell promoter just closing up shop on a failed SPE after you lose all your money?

If not I would not do this as you have no idea who you could get Is your market so slow that you can’t find good quality tenants who meet all of your criteria?