In short, you need to stay there a year as an owner-occupant and then you refinance into a conventional, rent both units and then you can use the FHA to do it again on a new one.

It's hard to stay that today. 

Employment wise, Aultman Hospital is consuming the SW part of Canton and Timken Steel keeps plugging along with some smaller manufacturing companies staying steady, but outside of Aultman I haven't seen any significant job growth or companies moving here, and if they do, they usually aren't coming into the City.  

Budget wise I would like to stay below $220,000 for the house. 

If you can get hold of a reliable and honest builder, you will be fine (that does not mean you will not go over budget).Low CapEx, Little Hassle, Quality Tenant, You can manage new construction out of state for the first 5-years, Tenant May Stay longer (because is a brand new house) are few benefits of new construction.You may not be able to get close to the 1% rule though.Goodluck

The students have been allowed to live all over the west side of the city, and student rents stayed pretty steady (though they have increased every year that I've been doing leasing). 

There is what they call a stay on the property in residential cases for at least 30 days.

Do they intend to stay there or are you going to get hit with remodelling expenses?

Structuring your lease in this way would benefit you by 1) locking in a longer term contract to avoid turnover costs and vacancy loss; 2) it moves your lease end date out of the winter season and into spring/summer of 2026 so it can be more easily marketed and re-rented to match the seasonal demand cycle; and 3) it avoids any upset/angry tenants who may have been incorrectly assuming their rent was going to stay in the $1,200 range after their first 6-month lease term.Would love to hear any updates you have on how this one shakes out for you though!

A lender should not be guilting you into staying with them.