I do not know of any laws preventing such an arrangement and I'm pretty sure this is done all the time.  

Encourage the tenant to make certain the litter boxes are changed often to prevent accidents (I keep mine in a bathtub in a bathroom we don't use).  

I am in the process of doing my due diligence to prevent dealing with inexperienced lenders.

What makes that scenario much less likely to happen today are the reluctance of the banks and lenders to leverage themselves that much, the forcing, by regulation, to prevent them from getting too leveraged, and the collapse of those toxic assets that used to be traded around like a game of musical chairs, with the value only set by whoever was dumb enough to pay it, in the hopes there would be a bigger fool down the road. 

I know both you guys try hard to prevent this from happening. 

In other words, I do not think adding a co-signer really prevents a bad tenant from proving to be just that...

A few weeks later they called the board of health on me.I review the items from board of health, and they are very ridiculous.Example, stain on the ceiling (need repair), the toilet seat is old and not smooth (need repair), tenant has no access to the basement, I don't post my contact information in the building ... etc.What is your opinion on this matter if you have encountered it in the past?

My advice for newbies is always to do as much research as you can (and @Casey Miles made a GREAT point about being aggressively patient) but to take the time to ask yourself (and your family) and few important questions to help weed out options and prevent analysis paralysis.

Hello BP,I've used General Finish Java stain on my personal home and it turned out wonderful, however the drying time can be 3-4 hours and that's if you put it in the sun to dry.

You don't want obstructions, but the trap will prevent any nasty sewer smells from coming up the sink.