Apache 2 Symbolic link not allowed or link target not accessible
Solution 1:
I had a very similar problem. Like you, I was unable to follow symlinks under my home directory even though I had the FollowSymlinks enabled plus I could ls around with my http user, but putting symlinks under /srv/http worked just fine... I fixed it by chmod'ing my home directory to be executable:
chmod +x /home/mgalgs
And that did it for me! Maybe try
chmod +x /home/foo/app1
Solution 2:
You might try setting the option
Options +FollowSymLinks
in your configuration. See the Documentation here for more details.