The lender probably won't work with you on that because that isn't how FHA loans work, they need to be sure that the house will have a value that justifies their loan amount so they can give you a low down payment. 

The more information is that the 7 year ARM can get rates as low as traditional financing (almost) and won't require reserve funds for other loans.

My most recent role paid around $140k between salary and bonus in Kentucky, which has a pretty low COL. 

You can go as low as 3% down with conventional.

I have very low paid expenditures, currently the property tax is $1,100 annually, I pay 65$ in insurance and I am setting aside 7% in capital expenditures, best of all no mortgage.

However, the interest rate on them tend to be low, so I would just stay current. 

The location has low crime rate, poor schools, city with plenty of amenities, etc. 

It was low end and very dated when I rented it out to the current tenant, and has seen significant wear and tear in the 5 years they've been there.

Start low and see what happens.

They're not too big, one is just over 5,000 sq. ft and the other is 13,125 square feet, but I got them at a low price...