So, they should be accounted for separately.

Will the city and insurance company hold me accountable and give me penalties even if it's living in the basement myself? 

I have 17 years of corporate RE and compliance experience, so the LIHTC reporting and annual financial audit does not scare me.  

I dont enjoy that it makes them sign up for a rent redi account etc. but I am not sure what other options to try.

Once you have a shortlist, sign up for an account with each one and test them extensively to see how they function.

Message from RentRedi:"ACTION REQUIRED:You must agree to the new terms and conditions to continue processing rent by October 7th.I have read and accept the Stripe Connected Account AgreementConfirmRentRedi is updating our payment processor to Stripe.

Finally, accountability is key, as we take ownership of our actions and results both individually and as a team, creating a foundation for trust, growth, and long-term success.

Cherry South Bend INCurrent Property Status: This asset is sub-performing, which means the borrower is due for July, and foreclosure is to be referred next month if the account is not brought current.Syndication: Scottsdale REI - III - XXVIProperty Address: 172 Carlson St, Westbrook MECurrent Property Status: The borrower is currently in foreclosure, and the Fair Debt Collection Practices Act (FDCPA) letters have recently been sent to the borrower.Syndication: Scottsdale REI - III - XXVIProperty Address: 13959 465th Ave, Wilmot SDCurrent Property Status: Scottsdale was required to issue Service by Publication.

DSCR stands for Debt Service Coverage Ratio, which is a calculation that determines if a loan's income covers its annual debt service. 

You've now become a mediator between them.I assume you prefer not to have the utilities and water accounts under your name.