As long as your rent assumptions are solid, you should do okay.I'd bump up Repairs and CapEx to 15% combined, unless it was recently renovated. 

Lender wants us to bring a lot more money to the closing table, in combination with a lower insurance premium, to get the deal closed and pass the the self sufficiency test.What are my other options?

Kevin to specifically answer your question as to the why, it's a combination of other work travel which puts me in FL anyway, the time I spend in Florida each year for work and family, and my love of the area. 

With their current combined income (GA income), they qualify.

Maybe the property is part of an overall bigger plan, like buying 10 $50k houses and then combining them into one property for $1 million.

That combined with FHA typically has a long closing window sometimes makes it a deterrent for sellers to accept an offer w/ FHA.  

If you combine that with an aging population and relatively low taxes combined with full municipal service, the city is ripe with opportunity.  

Their program really didn't fit my situation as it stands today, but combining it with my other park I believe it is an option. 

My idea: instead of spending $200k - $250k on one multi-family home, what if I buy two homes (a combination of single family, apartment, townhouse, etc.) for $100k - $125k each. 

The new lender is recommending refinancing the first property (which I planned on doing anyway) by basically paying off my original mortgage, combining the two properties under a new loan / mortgage.