You mentioned FHA financing, this is a great program only requiring 3.5% down payment however this would require that you live in the property for one year, also since it's such a competitive market the chances of an offer with 3.5% down payment being accepted is slim (unless you find something off market) since other investors are putting down well over 20% which is much more attractive to a Seller.

It is a major component of why real estate is such an attractive investment (along with tax benefits, principal reduction, and appreciation).Right now, mortgage interest rates are at an all time low.  

It doesn't "need" it, just would make the outside look a bit more attractive. 

However, you have to run the numbers and see if it is worth it in terms of attracting more rent.  

The sole reason my rents are so low was the idea that I could attract more interest in my rentals, but the backfire to my plan was it only seems to attract those on disability which only earn 12K a years tops.

@Matthew Schroeder thanks for the calculations on the cap rate it would appear that if Blaine wanted to leverage the equity in the units by maybe adding a few upgrades and flipping the units to an investor or someone who is more inclined to stay in the town then this may be more attractive. 

This is a solid A- property that attracts great tenants, but I can and do expect turnover costs each time.  

The lower rate and fixed terms are more attractive.  

Course there are other really scary signs such as the return of No Doc loans, very attractive credit options, easy access to other funding, TV shows creating a large class of buyers that think they can get rich quick by flipping houses and the huge surge in interest for "passive investments" by people who may not be prepared to properly vet the provider or to live with the problems when they come up. 

I try to avoid a lot of 1/1s because they don't attract stable tenants.