With that said pick your neighborhoods carefully and understand that just because it's cheaper than Brooklyn it doesn't mean it's a good deal.  

Because he had a mortgage of $6k/mth and a car note of $2k/mth...in addition to his other household expenses. 

He owes about $80k on the mortgage. 

The house is on a 30 year fixed conventional at 3.75 with less than a year into the mortgage. 

If you can get others to pay down your mortgage, it might be worth it.Basically, it's like living in AirBNBs while you're home... but its YOURS.Of course, run the numbers and see if that makes sense.

There's a house up for sale but the owner currently has an outstanding mortgage loan.

Sounds like its irregular hauling though, in which case it would be cheaper to drive a small car and rent a truck when needed.

Annual Premium - FHA loans have expensive private mortgage insurance premiums (which is required of all loans where more than 80% is still owed), tacked onto the interest rate.

I've come across some deals that the seller is willing to hold back a second mortgage of 15% and another deal where the seller was willing to hold back a second of 20%.  

@Tim Powell go to any bank and sit with a mortgage lender.