My suggestion would be to find a real estate to represent you in the transaction. Your agent would be able to check on recent activity in this neighborhood and help you determine a negotiating strategy to help you buy a home.
I did a quick check on this property and it looks like your monthly expenses will run about $1,288. The taxes for this property are pretty high - more than $4,400/year for $145,000 sales price (that's more than $370/month just for property taxes). At this time it looks like the property is appraised for over $164,000 value (taxes = $5,027/yr, $419/month), so you'll have to get the appraisal district to lower the appraisal value of the house.. In addition to the School taxes, it is also in a MUD (Municipal Utility District) which is taxing at .93/$100 of assessed tax. Quite high. Also there appears to be an HOA for the neighborhood with Annual fee of about $500.
It is possible that your husband could qualify for a disabled Vet homestead tax rate...that would be worth looking into whether you get this house or another house. That could really save you some money over time.
If the loan is an adjustable rate mortgage (ARM), I agree with you, you should look elsewhere. 5.3% for an ARM loan doesn't sound like a good deal right now. Interest rates are falling for fixed rate home mortgage loans. If you don't like the monthly costs with the ARM now, you're really going to hate it when the interest rate goes up.
I suggest you get a real estate agent to help you locate a house that will give you the monthly payment you want to have. The agent may also be able to recommend a lender who can do VA loans with fixed rates or another loan program with better deal than VA. You may be able to find a nice house in a neighborhood that does not have such a high tax rate for a MUD.
I don't know what the housing market is like in Houston, but from info on the web site, at this price, this house looks to be about $19,000 less than appraised value. It may not sell for much less than $145,000 at this time.
The appraisal will be done by your lender after you are under contract and have done your inspection.
Again, get yourself a real estate agent to represent your interest in your home purchase.