What if there is an extensive repair needed?

Liability, neighbour issues as well as extensive ware and tear on the property will be through the roof.

From the outside, it needs a new roof, many/most windows, extensive landscaping, and new siding (about 50/50 brick/siding, brick is good). 

I would be coming up with a new plan :)But if I was back in the day where it was just me (and I wasn't as spoiled as I am now with running water/TV/Internet and electricity, I'd have a cot up in a room with an extension cord running a fan so I could sleep.So it all depends on your comfort level.

My buyer needs to demonstrate stable work history which requires an additional 2 month added.  His bank just informed him while we are already in contract and was hoping to close next week.  He wants to rent for 2 mon...

They are your guide book to make sure you stay legal.

That assumes your contract allows for you to "automatically extend" your option period without seller's written agreement on any subsequent extensions.

I've been doing extensive research on up and coming areas in DC: Trinidad, Deanwood, and Anacostia in particular.

They've asked for several extensions while they try to work out financing with different lenders.

Try to get extensive knowledge of all the DPA programs in your area not for guidelines but for product purpose.