While the township didn't initially ask for this inspection, they advised it "better to do" when I called to check.

Inspection tomorrow.

How did this pass an inspection with no drain?

If the HELOC amount you're requesting is relatively low (often below $100,000), lenders might waive the full appraisal.Drive-By Appraisal : Instead of a full interior inspection, a drive-by appraisal involves the appraiser evaluating the exterior of the property only.Desktop Appraisal : This type of appraisal is conducted remotely using data and photos provided by the homeowner or real estate agents.Based on the little knowledge that I have about stuff like this it sounds like you need to connect with existing lenders in your network or find new lenders in your network that have programs aligned with your goals.

You need to add an inspection period to the contract, this would give you an opportunity to preform inspections, negotiate, or even back out of the contract and get your earnest money back if it's necessary.   

I considered ordering the lender's inspection/appraisal, but this wasn't an option because the water and electricity are currently turned off, and HUD won't turn them back on until I have submitted earnest money of $2,000.

Part of DD is to verify that termite inspections have been done.

It depends on the condition, but if it passes a 4-point inspection, I would definitely go for a novation first because they need help with bills, so you could probably support them with that while getting a retail buyer.

An appraiser will give you a detailed report based on a thorough inspection and analysis of comparable sales, market conditions, and other factors.Remember, price estimates can vary and everything is an opinion to some extent.

@Veronica Mitchell most contracts have a finance contingency where if you can’t get the loan then you get your earnest money back, but you’d still lose the money spent on inspections and appraisal if already done.