Here’s an opinion:
The salient fact of the above is that an applicant can ask for a review and that the finaid officers have the ability to override the formula when the information is compelling. In this case, NOT commingling the proceeds and setting up specific accounts is a good start. Another option is to talk to a title company in case there are prospects and ask to open a escrow account specifically dedicated to the purchase of the future home. With low interest, this should not cost a fortune. There is a more aggressive stance that could be used regarding reporting the 200,000 – still showing the existence of the assets but not listing under the standard cash.
If the funds will not be used to purchase another home, hire a specialist and discuss converting the cash into an asset that might be excluded from the FAFSA calculations.