No more messing around.If they get out without issue, fix and clean whatever was done and thank your lucky stars you got out with minimal problems.

If you did a full repipe and gutted the entire property then I assume (in all that means) that there were permits pulled and this should have been caught when the inspector did their rough in walk through or atleast the final occupancy inspection. 

I'm an independent agent here in AR and I write a lot of rental property, with ~6 preferred markets and if the properties have some issues, age, claim history etc.

Verify its condition and ensure the seller discloses any known issues.

During those 10 days, if they find issues they want repaired, compensated for, its negotiated.

Second biggest mistake is failing to realize these construction loans allow draws on improvements meaning cash expenditures are required before the first draw can be issued.

The same issue? 

The Fannie and Freddie programs handle this issue slightly differently.

Does anyone here faced similar issue ?

If you can find practice tests, that is my recommendation - that is what I did after taking the required time component and did not have any issues passing the test.