So many people in their 70's and 80's have to dramatically change their lifestyles because they can no longer drive.

Shave and a haircut, get out.   

@Mike S. have you actually spoken to any of them?

Unfortunately - for lack of historical perspective - since LLCs shave been around, interest rates have been going down; if this situation changes, lenders may start exercising the wording in the contracts.

I have thought of spray foam which creates its own vapor barrier but it is way too big of a job for the standard DIY kits. 

No mention of this in the auction listing.Another had a split foundation--splitting in half by several inches, front to back, repaired with foam. 

This, to them, was to shave costs and increase profits.

If you have recurring dryrot, you may obsolutely need to remove and not just side over the old, which will give you the opportunity to use foam sheathing and housewrap.

I do not know how beneficial it might be to you but you might consider reviewing your entire project and see if there isn't somewhere you can shave off $500,00 worth to cover the cost of having a contractor buy the permits.

If not, I looked up delayed financing on the Fannie Mae site.The original purchase transaction was an arms-length transaction.For this refinance transaction, the borrower(s) must meet Fannie Mae’s borrower eligibility requirements as described in B2-2-01, General Borrower Eligibility RequirementsThe borrower(s) may have initially purchased the property as one of the following:a natural person;an eligible inter vivos revocable trust, when the borrower is both the individual establishing the trust and the beneficiary of the trust;an eligible land trust when the borrower is the beneficiary of the land trust; oran LLC or partnership in which the borrower(s) have an individual or joint ownership of 100%.The original purchase transaction is documented by a settlement statement, which confirms that no mortgage financing was used to obtain the subject property.