I live in midwest zone 5. For the second floor of my 1925 house, I need 50K heating and 22K cooling. 

My house came with an air handler in the attic, that is the bad news.  The air hander feeds the ducts in the second floor of the house. The good news is that the ducts are below the insulation. I have not inspected or air sealed the ducts (on my todo). 

I’m planning to replace this unit with a heat pump likely Fujitsu 30k (AMUG30LMAS with AOUH30LUAH1).

I know air handler in the attic will be inefficient. But I don’t have a better alternative. There are lot of rooms in the second floor. So wall units won’t have good coverage. Slim duct might be an option. But the max BTU for slim duct seems to be 24K btu. 

I plan to install the new air handler horizontally to reduce condensation dripping into the duct (happening now). And insulate it. Could I build a rigid foam or drywall around it to insulate it?

I’m worried during winter there will be too much condensation around the unit. Will this be a problem?

Thanks.