Based on my research, every area that I'm looking to invest in appears to be "red-hot".

Is there any red flag here?

In regards to your first bolded statement, FHA will want you to "owner-occupy". 

@Ethan Field there is a lot of red flags on this:1.

This last point is in bold because I feel it is the most important.

Most properties in Pflugerville are red hot and selling 20%+ on the MLS.

What's crazy to me is how it's not only Austin, but also DFW, Houston AND San Antonio that are all red hot.

Just bet your money on red or black. 

Is there suspected contaminant or red flags?

This is not only going to add to massive deficits on a short term basis, but also will roll out a red carpet precedent for future bail outs of even more disgustingly irresponsible wasteful spending and gross mismanagement.Your tax dollars hard at work.