I would assume any court actions, along with an LP filed, sufficiently cloud the title, so the seller can’t reasonably give clear title.  

However my real concern is you mentioned that your bills depend on their ability to pay as well which implies that you don't have sufficient cash reserves to handle financial hiccups without putting yourself and your family in a financial tight spot. 

But I'd want a sufficient discount that it was worth it.

They just include a few requirements such as the borrower having enough equity in the property, sufficient cash on hand for making monthly payments, and a reasonable strategy to exit.

In most cases, a new coat of paint - or at the very least, repainting areas that are presently chipping, is sufficient.

A $200 fine is not sufficient if there's been a significant amount of smoking.

I'm also not able to qualify for FHA because properties in my market do not meet the self-sufficiency rules. 

Another point you need to be aware of is the FHA self sufficiency rule that applies to any 3-4 unit building (but not to duplexes).

If it’s a part of the main structure and conforms with the rest of the home in terms of building components, heated and cooled sufficiently, etc. it should be included in the GLA of the main structure and should not be valued any differently.

I am only asking bc my w2 income is not sufficient enough to get a loan on the type of property we want.