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If you are to raise the ceiling raise it to a full eight foot. Might be worth the cost to remove the second floor and start over. Perhaps a dormer in the middle section leaving the house lines in the front and back will work. Whatever you do make it look nice. A seven foot ceiling looks bad. Going cheap on the windows looks bad. Must have curb appeal when complete to get the most bang for your buck. Drive around and look at other houses and see what will work. I would wait to move in until construction is complete. If that is not an option do the dirty work and get it dried in before moving in. To much dust, lead paint and who knows what to bring family in to breath.
 
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