I was hoping to buy a primary property and airbnb or rent the other rooms to reduce costs and build equity in something (point is to not waste money renting).

Peer into the house - what you see is what your house will be.Don't beat yourself up too badly - everyone has rented to a bad tenant (or will someday) - just learn a LOT from the experience to greatly reduce your chances of doing the same again.

Your $1450/MO housing DTI PLUS the $1,500/MO in consumer debt would put your Total DTI well over 41% ($1,450+$1,500=$2,950 or 59% total DTI), so they would reduce the amount of mortgage approved to keep you under that 41% total DTI.

I found it and had my invoice for this month reduced by almost $11,000. 

Fees like these are sometimes there to weed out  "what's left behind by a north bound bull"I'd ask for it to be waived, reduced and if not, I'd pay it and cooperate to achieve my goal.

I don't want them to reduce the purchase price as these expenses are not allowable in a 1031 exchange, and I want to maximize my use of funds.I am not getting good guidance from my 1031 firm (and can't get in touch with my accountant at the moment) so I'm wondering if anyone has experience in this topic. 

But when a long train of abuses and usurpations, pursuing invariably the same object evinces a design to reduce them under absolute despotism, it is their right, it is their duty, to throw off such government, and to provide new guards for their future security.

It would be a rare inspection that didn't uncover enough problems to get the price reduced by at least the cost of the inspection.

Answer: I have to save money and reduce debt.

We had told the selling agent that we were going to reduce our offer based on the dollar amount of the 1% fee.