Sorry for the lack of good advice but we are in one of the biggest home sales droughts in U.S. history so it’s just a tough market. 

Potential solution: Get business related insurance (either through rental or umbrella), and town permission to run a business here.3) Not being entirely truthful of questionnaire when asked about history.

I think I'm comfortable with this overall given the long-term tenants with a great history of paying on time.

And with a singular "simple" quite "stimulus" trillion handed to JP to "provide liquidity" to "Protect" creditors/ business/ Americans/ etc etc pick your slogan, we the American tax payers just funded the single largest hostile take over in human history. 

Ty, do you see any issues with the fact the daughter is obtaining the loan as a Second Home but not using the loan for a second home?

What documents do they require, what credit scores do they allow, how do they verify previous rental history, etc.?

It scrapes your lists using data points from the entire history of past transactions and ranks properties by their likelihood to sell.https://www.dataflik.com/ 

Verifying last 2 years of rental history very important!

You only need a place to track tenant information, payment history, maintenance, etc.

The article does say " Alternative Assessment Methods: Consider looking at a potential tenant’s credit score, rental history, and references.