No, they won't take your word for not wanting that bathroom. The FHA requires that all features of the house be functional and in good order. The only way you'll be able to get the matter settled to their satisfaction is either to get the repairs done or remove the fixtures, so that it's no longer a bathroom. Of course, if the repairs needed include wood rot or some other structural work, that part will still need to be done in order to qualify for FHA financing. Remember, too, that one less bathroom will reduce the appraised value of the home, which might disqualify it for the loan.