Does the house need to be unoccupied for a follow up inspection?

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Extemely Important Question: Am I allowed to have a non-renter living in my house that is not yet a certified rental?

I am being 100% honest in what I am about to type: 

I bought my grandpa's house two years ago, and lived in it as my primary residence for 2.5 years. This January, while I still was living in my home, I took in a friend in need who was kicked out of his place of stay. I asked him if he could help pay for utilities, internet and Netflix. since his occupancy was sure to rise the utility bills. There is no formal agreement, no papers signed, nothing like that. 

Meanwhile, I have been dating someone for a while and have been really eager to move in with her. For multiple reasons it just worked out that I would be moving in with her into her house. Therefore, after about a month of living with my friend I moved much of my stuff over to her house and have been staying with her for over two months now. 

My friend still remains at my house. Since I don't want to sell the house, I am deciding to try out renting. 

I had the rental inspector come out and inspect the house. The paper says "No person shall occupy this house until a certificate of occupancy is issued." The inspector said nothing of my friends stuff everywhere and I haven't exactly officially moved out. (my mail still goes there, my license still says its my house)

Do I need to truly have the house unoccupied by the time the follow up inspection occurs? I am a honest man and want to be sure I follow the proper procedures. 

Thank you for any and all answers.