Hi Looking2, Kenwood Commons has experienced a rising rental/owner ratio. Banks require minimum ratios (percentage) before they will lend. I have three clients who have bought in Kenwood Commons that have either rented or sold their units. I don't have the requirements of all lenders at my fingertips but, it makes sense that FHA would not approve.
If you were successful purchasing one as an Owner Occupied...renting is a matter of choice at that point.
The disparity in HOA fees is based on old HOA fees compared to current HOA fees.
Having success rening your property here would be much the same as the surrounding South Valley. You will probably "probable" see a vacancy rate at 5-7%. It seems that the Vacancy rates have increased marginally. This is Bay Area wide as well.
The affordability of Kenwood Commons is what I expect has captured your interest. If so, have you considered Downer Estates off Blossom Hill Road?