FHA does not mean the value will come in any lower.

Could this be negotiated with a lender and would they be open to accepting a lower down payment?

Their rent to "all in" ratio is much lower than what I want, but somehow they use this strategy to get up to 100 houses.

You probably aren't going to find any markets in Maryland with a lower price-of-entry then Baltimore, so if "low budget appeal" is your driving factor then focus on Baltimore and maybe Dundalk.  

However, typically if you buy cash, that percentage tends to be lower than if you borrow.

A hard money lender or private lender may have different down payment options but don't expect anything much lower than 20%.

If anything it would help lower your DTI. 

That would be an another red flag.As many realtors on BP have stated, too many folks run towards a lower rate, not realizing that a lower rate is not the end all, be all of getting a loan to closing.

Deals are common like this where if your buying turnkey parks, your going to pay a lower cap rate, and get lower cash on cash return. 

You could also get a 203k loan from a bank and you're only looking at 5%-15% down and deferred interest plus a lower rate.