If her goal is to provide some of the proceeds to her ex in good faith, she can simply sell the property, have a tax professional estimate the taxable gains.

I would get together with your realtor, have them tour your property and then run comps to see what the value add would be, then simply pencil it out to determine the return. 

They simply do Fannie, Freddie, FHA, VA, and USDA loans.

Should it simply be one of two choices: deny application or accept application with ESA exemption even if the property qualifies for the FHA exemption?

I’d simply ask in what situations where the broker and the brokers firm did nothing to facilitate the sale do you think you should get paid a commission?

If this is simply you not wanting to accept partial payments and the rent is current, stop accepting it - and send a Lease Violation/Notice of Quit for Non-Payment of Rent - and force the full rent to be paid per the lease or start eviction.  

Quote from @Collin Hays: I suspect that the Smokies is your best choice, simply because it is a year-round destination. 

If I pay it off, I could maximize cash flow earlier, reducing financial stress and allowing me to focus on other ventures or simply enjoy life more.On the other hand, I know some people advocate for keeping cheap debt and using the extra cash to invest elsewhere for potentially higher returns.Why I’m leaning toward paying it off:Security: No debt = peace of mind.Financial freedom earlier: A fully paid-off rental would give me a significant monthly cash flow?

Business owners won't want to get tied up in litigation and if there is a good chance they will lose, it is easier to simply follow the contract.How would that work with a lower-end tenant? 

Whether it’s for startup costs, equipment, or marketing, leveraging your home’s value can help bring your entrepreneurial goals to life.Bottom LineWhether you’re thinking about selling, upgrading, or simply want to understand your options, your home equity is a powerful resource.