Tack on another $885 for MI, then taxes and insurance and you're well over the self sufficiency rule.

Yes, you can use a standard purchase and sales agreement 

I definitely agree with everything @Caleb Heimsoth said. 5.2% is very low as far as historical standards are concerned. 

I allow dogs in all my apartments but of course not the breeds excluded by my insurance.

But if you want to buy a property with a good tenant in it already, you can always write something in the contract giving you the right to do a standard background check on the the current tenant.

Other things I look for:E & O and liability insurance?

I would take that HomePossible with No mortgage insurance. 

Any insurance concerns?

Licensed, Bonded & Insured to do any scope of work.

I can assure you that I do not have a thick foreign accent and I don't charge ANY upfront "insurance" fees.