I have plenty of ads, free rent concessions, signage in the grass on the road etc...  

A busier road can be an advantage for a rental as it can give more sign exposure. 

If your score is the only road block, you may be good, but lenders are really good at throwing up new road blocks.

This sounds like your dealing with a dishonest owner or contractor, I would walk away an never look back, only because what else have they been dishonest about that’s going to bite you in the butt down the road.

I am looking to use hard money to buy the property and then refinance 6-months down the road.

@Jesse Bryant I'd recommend  you obtain a copy of the MN landlord tenant laws. this is going to be your road map for your rentals.  

If this is a road you want to go down, you'll need to become familiar with meth testing, meth levels, and what the laws are regarding renting and selling properties that have various levels of meth contamination.

If this tenant is making a big issue out of this, there may be more coming down the road.  

But at the same time I want to start investing I live in Indiana where housing is rather cheap.and VA loan is out of question cause I want to be able to rent the home down the road so I think a first look fannie mae loan will be for my first home.Now my first rental will be a 35k home that will be FHA.

I am just up the road from Polson.