The appraisal should be an independent party that has some expertise in determining value (even though I have seen many poor appraisers). 

Material misrepresentations or omissions on the Application will constitute a default under the Lease or Rental Agreement between the parties.

@Benjamin OrozcoUpdate I talked to all three parties and repaired the mistakes I made.

Every 1k financed is usually under $5 per month which will not break the bank.Also, you can get the dn pmt as a gift from a qualified party.

2) Is there a better solution to prevent having to rent from a third party prior to purchasing a second property under an FHA?

Who is responsible for the “error” is irrelevant if the closing docs allocate ultimate responsibility to the party who should pay the item... which they should.This is like refusing to pay your share of a final water bill.

This can be a party thread for sure!

The bottom line is that you need your contracts to clearly identify the rights and obligations of the parties and for it to be enforceable.

Once you have both contracts signed make sure you are checking in with the three major parties at least weekly (seller, title, and buyer).

Can a single party unilaterally change the title/deed without permission of the other interested parties?