My first flip that was under contract to sell ended up being terminated because of income discrepancies on buyer side so the lender wasn't into it.

So the "ADU" was allowed much to my delight:-) You can call it a stroke of luck, but you find such discrepancies in zoning and usage mostly in historic neighborhoods. 

It's good size - 1.67 acres, I'm 99% sure there were no encroachments.The B-II Requirements includes a clause:  "Any encroachment, encumbrance, violation or adverse circumstance affecting the Title including discrepancies, conflicts in boundary lines, shortage in area, or any other facts that would be disclosed by an accurate and complete land survey of the land, and are not shown in the Public Records."

I've resubmitted reciepts totalling about $9,500 in discrepencies in items I believe should be covered in full such as our kicthen cabinets(lowers only), bathroom vanity that was built in and not salvagable, and some other minor things. 

I'm from close by and don't invest in Atlanta because it is too hard.I can tell you that even in my area which is an hour (or way more in traffic) from Atlanta we have a very large discrepancy between bid and ask in cap rate going on now. 

I promise you will have discrepancies with people and it helps to be able to refer back to the contract and keep yourself out of any legal trouble.

Cut out any potential discrepancies! 

However, I do not participate in the S8 program and my unit is not approved by S8 for inclusion in their program. minor discrepancy the S8 does NOT provide a voucher for the house.. the tenant has the voucher and in tough rental markets they know its the golden ticket and waive it around as such.. but what your getting at is that hud will then do an inspection and if the property does not pass they wont let the tenant use the voucher for that property until its brought up to standards.but lets be realistic who is going to keep a property vacant just waiting for a hud inspection that you know is going to fail.. 

Can there be any genuine reason for discrepency?

If a discrepancy exists, point it out, don't throw out what you think the $ adjustment warrants.2.