I cannot think of a way that you (the LL who stands to "benefit" by them repairing their own space that they are paying you to use) will come across in a positive way.Plus, the tenant who incurred damage due to the other tenant's leak, may have some legal rights to have the tenant with the leaking pipes pay for the repair in both spaces.Now, beyond the legal side, you also need cognizant that most mom and pop tenants (which I assume these are) are not great with their money.  

Take the time to craft a listing that stands out and is ready to book quickly once it’s live.

It's essentially using multiple novel (but legal) applications of long-standing regs to an activity that largely didn't exist at the time they were created. 

But, all the above in the first paragraph still stands. 

That is where the letter of the law stands and to have you covered..

For the home loan, if assuming it isn’t an option with your current income, you might consider using some of the cabin sale proceeds as reserves or paying down debt to improve your financial standing.

Quote from @Grayson Grzybowski: @Crystal SmithThank you for taking the time to provide your insight on the questions I have asked.For your introductory statement, I understand this is how debt should be used. 1) I have already went out of my way to ask for as high of a limit as I can just to have it on stand by. 2) I am trying to build value into our home to increase the equity faster so I can utilize it as leverage in time. 3) I have already reached out to a lot of different investors and have their terms & conditions at hand. 

As it stands today, I have roughly 70k liquid and looking to invest in building a new construction home for profit.

Fast forward to today and one of those existing STR's has become a nuisance to the neighborhood and so the HOA board is planning to ban all STR's using what they believe are provisions in the CC&Rs to justify it and have consulted an attorney to validate the legal standing on implementing this ban.The CC&Rs were written in 1998 (before STR's was even a thing) and have these sections being cited by a couple members of the board as justification for banning the rentals (note there is not anything explicit about STR's in the documents)Section 1 – Single Family Residential – states in part, “… Lots… shall be used for no purpose other than residential purposes.”

The tenant is a bully and the ONLY way a bully stops is when you stand up to them.