We have a sizable amount of equity in the home we live in and I also have an annuity account set up through my work that I can borrow against.  

That is the amount you would need to safely replace your income with an annuity or some other conservative income investment.

Other assets have published values and are liquid, stocks and bonds or annuities are easier to administer and cost much less to do so.

Real estate is unique and is not comparable to stocks or bonds or annuities or commercial paper purchased on an auto dealership!

One parent is paying the bills and has a good income from a business and investment dividends/annuities, but their credit shows a state tax lien with a low 600s credit.

It seems like all plans being pitched can be described as diversify into the stock market & mutual funds, or buy annuities and pay someone 1% of my net-worth annually regardless of performance.

The three categories are as follows:• Category 1: Gross income from interest, dividends, annuities, royalties, and rents, which is not derived in the ordinary course of an active trade or business.• Category 2: Gross income from a trade or business that is a passive activity or a trade or business of trading in financial instruments or commodities.• Category 3: Net gain (to the extent taken into account in computing regular taxable income) attributable to the disposition of nonbusiness property and property other than property held in a trade or business to which the 3.8% NIIT does not apply.

Is he getting a lump sum that he will use to spend recklessly or is he converting it to an annuity giving him a monthly payment thereafter?

Try to shift your mindset, that since you are hiring a PM, it's more like an annuity. 

My credit is awful and I am not able to even use my Annuity fund through my union for an FHA loan at the moment.