What you are describing is called the rule of thumb for HVAC sizing. It is the wrong way to do it and results in systems that are over sized. It is a form of guessing in my opinion. This is the way HVAC contractors who are lazy and can't be bothered to spend the time to calculate the requirements of your house. Over sized systems cost more to install, are inefficient, noisy, uncomfortable, and die prematurely. The only positive is they are more profitable for the HVAC contractor. I would not install a humidifier unless I really needed it. Are you currently having low humidity problems? Low humidity is usually a sign of leaking windows and doors. The steam humidifiers are supposed to be the best.

Thank you for your response! I'll try to answer your question below define poorly installed batts. We have gaps between bats AND some sections where batts don't lie flat on the attic floor. Builder's insulation subcontractor originally tried taking the 9inch thick batts and slicing them in thirds (like slicing bread) to make three 3 inch batts that he thought I would accepts as the correct insulation! These were laid between joists. When I caught onto the subterfuge, he claimed that he hadn't been aware of the cheating but would make sure the insulation was done over properly. Instead, he allowed them to just drape 9 inch batts perpendicularly across the joists over the top of the 3 inch thick slices. Because it was very difficult for me to get up into the attic (attic ladder hadn't yet been installed), I trusted builder to make sure it was done over correctly. It wasn't and it is a MAJOR mess. To the extent that we are able to reach the batts, we intend to pick them up and reposition them correctly or just take them out. But there are areas behind the heaters that the only way to reach is by crawling over the heaters so we were hoping we could just blow insulation into those areas without first repositioning (or taking out) the batts. Guess not. do you have service platforms around the units? there should be a 3' walkway to and around units for service. The units both lay beside a platform so it is easy enough to get to one side but there is no walkway "around" them. check & see if batts were installed under unit platforms and walkways...water heaters too if they are in the attic. there are batts between the joists that the units sit on. Whether the batts extend the entire distance under the units were only put in place at the very edges to make it look like underneath the units was insulated, I honestly don't know. Will have to pull a couple out to check. Thanks for suggestion. understand that under heating system you'll only have R-30, which is code here in La. how about in Tx? at max we put R-38. We're outside of a code restricted area but under our contract the builder was supposed to have built to meet code requirements of the nearest major metro area which, at that time was R-30 in the attic. New recommendations for this area are R-50. I'm not sure what the nearest metro code now requires. I don't know what value you plan to insulate to... what is your goal? and what is the purpose of the added insulation? We would like to get as close to R-50 as possible even if some parts of the roof are only insulated to R-30 or lower. Seems like it is good to insulate as much of the attic as possible to R-50 to reduce heat transfer between attic and living areas. I find it is usually air leakage into the house that people try to solve by adding insulation. it never works unless the new insulation both insulates and air seals. (foam ins) with propane you'd have to add combustion air if you foamed the roofline. many insulation companies don't understand how to do this...nor to hvac companies. air sealing is easier with batts than with any other insulation. move the batt...do the air sealing... put the batt back. Not sure I totally understand you here. Our attic is not sealed. We have ridgeline vents and soffit vents. So far I haven't seen any signs of inadequate ventilation in the attic and I know that we need to leave space for air to circulate between soffit vents and ridge vent. We intend to be sure to leave the baffles in place and not block either end. As for air infiltration into the house, the house is pretty tightly sealed. We fired the builder before the interior walls were insulated or sheetrocked and I personally went around with cans of spray foam filling in every crack where I could see light coming thru the exterior shell. All the gaps around exterior electrical plugs, etc. Then we hired a different insulation sub to install the wall batts and I checked every piece of it before sheetrocking started. So, the house is tight. do you have recessed lights? IC or ICAT? the IC lights are a big leakage to living space. We do have recessed lights. They are ICAT. (I've checked). were ducts mastic sealed? or just duct/foil tape? returns in attic mastic sealed? I don't know. What should I look for to find out? And if just duct/foil tape sealed, what is the proper way to fix it and is this a job a homeowner can do or will we need to hire pros? I'm assuming this should probably be done before blowing in additional insulation so one is not having to tromp over and thru the blown in insulation to reach the ducts to work on them.

You might be able to get a better quote on the furnace and A/C. I understand that you can only get an 80% furnace, but in that case you should consider getting the highest efficiency single stage A/C for that kind of money. I wouldn't invest in a tankless water heater at that price. Why not just a regular gas water heater or one that condenses and vents thru the side of the house with a pvc pipe? By the way, how much is your electricity? You may want to consider getting a heatpump which typically doesn't cost more than the same model A/C. The time to do something like this is when replacing the A/C.

Installing both tank type & tankless water heaters in the attic has been a common practice if Florida, Calif, and other regions in the sun belt for years. In fact, both the IRC & UPC address specific additional requirements for installing the water heater in the attic. 1. The water heater must be located within 20ft of the attic hatchway. 2.There must be at least a 24" wide solid floor catwalk from the hatchway to the water heater location. 3. There must be a 30" workspace in front of the water heater. 4.At the water heater location there must be a 24" solid floor walkway all around the heater. 5.There must be a 120v electrical outlet in the near proximity of the water heater to permit operating power tools when servicing the unit. 6.There must be an electric light in the near proximity of the heater and the light must be controlled by a switch that is placed near the attic hatchway. 7.There must be an approved drip pan with a minimum 3/4"dia drain line that is run outside and terminated by code specification or it must terminate in an approved indirect waste. 8.The TPRV must have a full bore discharge line that goes outside and discharges in an obvious location per code spec or it must discharge into an approved waste receptor at and obvious location. TPRV MAY NOT discharge into the pan. 9. The water heater must remain accessible for service or inspection, (must not be blocked by personal items stored in the attic.) Under the IRC the attic hatch must be a minimum of 22"x30" Under the UPC the attic hatch must be a minimum of 30" x 30" Note, those dimensions are the minimum, but code also says the water heater MUST fit through the opening. That would generally not be an issue with a tankless but with a tanktype you need to check the tank size.