When you reach out to one lender, you're stuck to one lender's rates, terms, and guidelines, along with the products they offer.

Your equity is in jeopardy in a SFH at this time.Others will have a opposing opinion but do you want to take the gamble of holding if you already know that you have likely maximised your appreciation for the foreseeable future and risk a market/equity drop.

Fannie Mae has strict guidelines on what they'll accept in rent to own contracts and it was looking like my best case scenario was using the $8,800 to lower the purchase price to $138,200 and get an FHA loan.

Again check your convenants for those guidelines.

The guideline you are referring to would be if the owner and borrower on the loan request had previously listed their property for sale, then yes, they get a max. of 70% LTV. 

I am not sure that property would qualify with FHA guidelines.

There are strict guidelines that have to be followed for owner occupied properties. 

Many local investors are using the following guidelines about Harvey homes.

They hate this and some are getting smarter and stating the right answers the questions even though clearly mini Pomeranian alerts them to seizures is BS, but can question any further according to ADA guidelines. 

Follow your state guidelines on contracts for preforeclosures and all the rules.. very important.