Claiming discrimination is not acceptable...you don't deserve that - but you do have a knowledge gap that may make it appear that you're avoiding something that could come back to haunt you under the Fair Housing Act.My recommendation: stop positioning yourself as a victim and start over with the caseworker.

So you don't avoid the taxes, you will just pay them in future years.

I was wondering if anyone could shed some light into some good areas to live/where to avoid? 

I don't believe we will see something like the 2008 housing crisis, but foreclosure should be avoided at all costs so home prices are not negatively impacted. 

I’m looking at Condos in my area in the $250k range, pulling $22.5k out of the 401k to buy, but was considering (if possible) a hard money lender for the other $40k (for 24 months) to avoid pmi (which is $270)My Questions are:Are there hard money lenders to stay away from?

I was trying to avoid having to manage them myself.

You can try to 1031(to avoid capital gains) into a DST (no hassle) or buying a bite size NNN property which has no landlord management(but the potential for vacancy and releasing).I like the private money route, especially if you keep the LTV low, although I'm not sure many would go for 60% at a private lender rate, but worth a shot! 

This material in the $2.15-$3.50 per sq ft is expensive … I guess I should avoid the ones priced under $2?

Have a plan for your charges, making on time payments, and paying the balance off within a quick amount of time to avoid costly finance charges. 

Are they trying to avoid capitol gains taxes?