@Gil KerenYou understand what a property that you want to buy looks like - numbers, area, condition.

Do lenders take into consideration the condition of the property?

We were able to negotiate the price down $10K after the inspection because the property was in a little worse condition than we thought going into it.

I went and inspected the now mostly vacation building and was pretty impressed with it's condition especially considering its new status as condemned.

I might just replace the refer with a used one in good condition. 

Some of them are forgivable loans while some grants have terms and conditions including a requirement to live in the house as a primary resident for 5 years otherwise you have to pay the grant money back. 

You can also use the program if you simply just don't like the condition of your proposed property.

You can also use the program if you simply just don't like the condition of your proposed property.

I do give them my opinion on the condition and necessary repairs but I stay away from the numbers for liability reasons.

Your assumptions look solid to me (much of this will be dependent on the age and condition of the house, but as a general rule your numbers should work well).