While I sympathize, I don't want that furniture in my house.On what grounds can I deny the application?

After inspection, sellers confirmed it's somewhere underneath the carpet and they have denied us access to pull the carpet bc they don't know the exact location of it (units are occupied).

A 2 person income I think is fine if they fit the qualifications you require.. either “is” or “is not” not a gray area.The more standardized you can become the more it will help you in the long run.Also make sure that whoever you deny you send them an adverse action denial letter.

@Charles KaoSBA/CDC denied my underwriting for the 504 because the loan amount was too small and they didn’t like where my down payment was coming from (HELOC).

It's not uncommon for someone to have a typo.If you verify their SSN and it still gives you an error, call SmartMove and ask them to see if it's a problem on their end.If everything is correct but the SSN doesn't appear valid, tell the applicant they are denied until they can prove the SSN is valid.

If you do not disclose that info and there is a loss, you've given the carrier an out to deny the claim. 

Is there anything else I am missing that I could get denied on?

Was denied for the very issues I’m going to use it to pay for (small judgement for 10k) and it looks like I’m still getting dinged for my xwifes car loan (6k.

All insurance policies have a Misrepresentation clause, stating if you "Misrepresent" the Rental, Business, Property, etc, as something other than it is, they can deny to pay claims.  

Are they obligated to provide the records after being under contract or can they deny my request?