The short time between drawing from the HELOC and paying back through cash out refi makes the rate difference between the two options pretty negligible as you’ve stated.

He sued me negligence, Retaliation and body injured.The timeline is as the following:Feb 26, 2019, he complained bathroom water dripping to downstair and rats crawling noise in the wall.March 3, 2019, he complained about the hot water heater issue.1.

What if you DO find clear signs of negligence or lack of cleanliness?

The difference was not negligible (3.75% LPMI vs 4.25% + PMI loans).

(f) Rights of the tenant under this section do not arise if the condition was caused by the willful or negligent act or omission of the tenant, a member of the tenant's family, a licensee, or other person on the premises with the tenant's consent.

So the benefits are negligible.

The "rent" paid builds up as a purchase credit that the tenant can use to purchase any park owned trailer in the park (usually the one they are in), tenant is responsible for all maintenance and repairs, and they forfeit any built-up credit if they are negligent, cause damage, or move out of the park.

If your HOA is found negligent then they would have to pay (or their insurance company). 

Not just your insurance premium, but the looming specter of a negligence, personal injury or wrongful death lawsuit. 

EDIT- the reason I was led to believe these disclosures are painful from an agent's perspective is because of the following excerpt in my CA licensee study materials:A transaction is not invalid if the required natural hazard disclosures are not provided, but the person who willingly or negligently did not make the disclosures is liable for damages.