I am in PA and yes, it is legal to charge late fees to your tenant regardless of Section 8 subsidies or not, provided the tenant's lease allows for them.

The property was rented and generated $160 cash flow after mortgage, taxes, insurance and property management fees were paid.

It likely is out of date as to cost as this info is quite old (my guess is 5 years but it could be longer):- Rent Recovery Service: offers flat fee service starting at $20. 3 letters start at $30.

How much of a credit do they offer at closing to cover the servicing fee?

That is part of the problem with a lot of companies (I am not knocking insula as dont have all the info/facts just stating how the business works), they engage brokers to get them loans and the brokers collect a small fee. unfortunately many of the brokers may be similar to real estate wholesalers - have little to no experience. 

I charged fees for other violations as well but the fees aren't enforceable here in Wisconsin because the lease did not explicitly state what they would be in advance.

If rent is due on the 1st and late by the 5th, apply the late fee on the 6th and serve a 3-day notice immediately.

Our 275 sq ft furnished garage should rent for $1600 - $1800/mo and the only extra fees compared to long term is $99/yr to post on furnishedfinders.com. ...I should have this finished by the end of next month, so can keep you updated on whether this plan works and what we rent for. 

Then pay them a fee for finding the deal and pay them 8-10% of rents to manage the rental(s).

This may result in late fees and eventual eviction if not cured within the legally provided time.