The tenants had already stayed one year in the house.

Stay hunting folks!

I know folks who go to LV all the time, who love to stay at a residence rather than stay on the strip or downtown. 

The fact that they own their homes is a plus, stay away from community owned homes, however the value of many homes in older communities does not set a high standard.

I believe a foreclosure will stay on my credit for 7 years, but I believe the impact is greatest in the first 2 years.So am I crazy for just letting the HOA proceed or is it worth it to simply pay it down?

They rarely stay in good condition or looking good for long.Fans are old.

So you would need to stay in the FHA loan for a while to refinance.  

This is not the business where you want to make mistakes or learn from your mistakes as if you get negative publicity upfront, those reviews will be there for a long time, and a huge majority of guests read these reviews before they decide on a property.I would also consider staying at another airbnb, especially by those who have high ratings and super host, to find out how they communicate or deal with their guests. 

Some loan packages require staying in the home for a period of time.

Right now we have low interest rates, low unemployment, low gas prices, low everything that we hope stays low.