It's particularly amusing when a non-attorney wants to explain the details and nuances of a legal proceeding.

Seller is agreeing to carry back 5% second of 400k fixed with a 30 year amortization for 2 years.Sellers comment to listing broker is they are worried that total price at closing will cause them to realize a gain on the 400k note they are taking back even if they have not collected it yet.Seller would be 1031 exchanging remaining sales proceeds.

I will keep looking but not sure how to proceed with these house prices? 

So just make sure all your numbers align, make sense, and you feel comfortable with them and then proceed.

We literally own 40 properties in Dayton,Ohio but want to sell everything we have here and invest all of our proceeds in GA.

I got good advice based on the roll of the dice i chose to play by proceeding with the FC.  

If you want to put your money into an arena that will likely outperform nearly every other means of accessible investment, then proceed.

If you decide to proceed, make sure your lender has experience doing a 203K on a HUD homeTo your other question, as long as you have a lender letter stating the terms, that will be good enough for HUD. 

My two cents on how you should proceed is as follows:1) Read the Ultimate Beginner's Guide ebook that they give you when you sign up here on BP.

Although the proposed deal was one that Zack was willing to fund, the purchase price and rehab costs weren't what I had hoped so we didn't proceed.