Let's say the city cites them for violations and they rack up penalties and fines. 

Based on the comments received thus far I think it's prob make the most sense to hold on to the note.

As I'm looking over their explanation I notice that I am being charged 8% of the rent received from CMHA. 8% from the rent the tenant pays and another 8% of the water bill which the tenant pays. 

However, you should be fine with their analysis.Don’t cheap out with free or $1500 reports.  

While the current conditions may feel challenging, they also present opportunities to fine-tune your strategy and stand out in a crowded market.Are you experiencing these trends in your portfolio?

Mortgage recasting is a great option for homeowners who:Have received a windfall, such as a bonus, inheritance, or proceeds from selling another property.Want to lower their monthly payments without extending their loan term or going through the hassle of refinancing.Are satisfied with their current interest rate and loan terms.How to Get StartedIf you’re considering mortgage recasting, here are the steps to take:Contact Your Lender: Ask if they offer mortgage recasting and confirm your loan’s eligibility.Determine the Lump Sum Amount: Decide how much you can afford to put toward your principal.Calculate Potential Savings: Use an online mortgage calculator or consult with your lender to estimate your new monthly payment and total savings.Submit the Request: Once you’ve made the lump sum payment, your lender will process the recasting and provide a new payment schedule.Final ThoughtsMortgage recasting can be a powerful tool for homeowners looking to reduce their monthly payments and save on interest without the cost and complexity of refinancing.

As the largest investor in each loan, we do receive the points at closings. 

I should have clarified that what I meant was that there are PMs out there that will do the most expedient thing and accept a tenant just to receive a quick commission.  

If other units at your price point have just hookups you will be fine with just hookups. 

If credit scores are fine, and you are just new to the work sector, then I would suggest doing a conventional loan with a strong income "non-occupying coborrower".