I am not too worried personally about the rain as none of my properties flooded during the 2015 flood, but there are a lot of low lying flood prone areas in Columbia.  

You haven't described a scenario that would qualify for one of the exceptions, so a "straight no" is the correct response.......Also, you know that FHA loans aren't the only low down payment options out there, right? 

It's not the most widespread way to sell a house, but there are tax advantages to those who would prefer them and don't need the money, there's contract for deed options for those purchasing low cost homes, there's people like myself who would like to purchase a property, rehab and sell it on seller financing...I think it's more accurate to say that there are newbies who hear about all these creative financing methods and think it's their way in when in most cases they are best reserved for more experienced investors.

Essentially their rent was SUPER low at 450/month. 

Is this a "housing project" for low income renters that may scare away some home buyers / renters and lower property values and rental income around it?

I dont want to low ball it and then have her slam the door in my face.

We were fortunate to be able buy it low enough that we can afford to do this and still make a significant profit. 

Someone has done something similar to what I want to do - building new mixed into an existing neighborhood - with five homes all side-by-side that average over $100,000 more than the existing homes in that area.Some of my questions are:Is there reason to be concerned that existing homes in the neighborhood have low values because of their age and condition, keeping in mind I want to build 9 or 10 and raise the level of the neighborhood?

Rent is 1300/month which is a little low for the market.My current loan has 19 years left in term, Montly P/I payment = $860.83, rate 4.85% annual adj.

I am glad because of the LLC added protection, low monthly mortage because I put 25% down(which i found private money on).