Sometimes, its only specific types of property in specific circumstances (ie. owned by an LP or 2 units+).

You may be reading the posts or listening to podcasts looking for exactly your circumstances instead of looking for generalities that you can apply to your circumstances.Write a description of the type of properties you want to look at. # of bedrooms.

There are several circumstances where you may be required to refund the money and if you spend it, that could be considered fraud.- If there was a fire or some type of natural disaster rendering the property inhabitable, you would be required to refund.- If the tenant moved out, you are required to make best effort to rerent.

Trying to do both will in all likelihood not turn out well, with lots of unforeseen consequences.

Your possibility of making a profit under these circumstances (distance, limited budget, lack of knowledge, lack of experience, reliance upon people you do not know and will not be able to trust) is no more than 5% at best, and likely closer to 1%. 

I currently own a single rental which cashflows nicely and is in a great area, but trying to decide if I should sell it due to my current circumstance.

(there are definitely some advantages to FHA, but also some disadvantages, which you can read about online...there are probably existing BP forum posts/articles about the topic).Regardless, you'll want to talk to some mortgage brokers who can assess your circumstances, and zero in on which option(s) might be best for you.

Some of the special circumstances to having two FHA loans are being relocated by your job (I believe its 50 miles out) or your family expanding. 

You can certainly offer to accept a partial payment if you are absolutely convinced it is a temporary situation, but you should not allow them to use the deposit under any circumstance.

Safest bet would be to let your Lender/servicer know of the unforeseen circumstances that came up so it doesn't look "sneaky" in the rare and unlikely event they would look into it further.