As far as the legal side goes, you can literally write the words "Addendum to Lease" on the top of the page and below it put what you want to do as far as inspections and note that the addendum is intended to supplement and/or amend the lease, then have both parties sign and it is a legally binding instrument.

There is a Proposition 2 - Constitutional Amendment being voted on November 6 election.

Do we need to sign some sort of amendment to the lease where I state the lease is being reduced by $20?

It's "underwriter discretion" on that one, and "underwriter discretion" is a bad place to be, since you as the borrower have zero control over if the underwriter's milk went bad ruining her breakfast that day, and you (presumably) don't want a half million dollar real estate transaction dependent on the expiration date on a $4 carton of milk.This is part of why CPAs and mortgage lenders are constantly at odds with each other, since great advice from a CPA focused on saving you tax dollars is often simultaneously horrible advice if you're goal is to buy a house next year and don't plan to pay cash.I just had a client whose return I amended with this issue. 2016 was their 2nd year in business CPA made them into an S Corp (didn't do salary or any thing else but ignore that for now)CPA then also made up $50k in completely bogus expenses because "my clients typically like getting a refund" They were trying to buy a house. 

Not each rental.The rules surrounding IRC Sec 199A are intricate and complex.  2018 might be a good year to get some quotes from a tax CPA/EA.I foresee a lot of 2018 amended returns in a year or two that were DIYed via TurboTax et al.

[Amended 2-5-1980 by Ord.

Could you tell him you are going to file amended returns for any money you've paid the government if he doesn't immediately do the right thing and put that property in an LLC and turn over management?

Being a bigot is not a crime and in fact is protected under our first amendment.  

In the notice I specified that we require her to give us the full deposit requesting an amendment to the rental agreement (in our agreement it says these can be done by either party with a 30-day notice).

Section 1.4000), as amended with LANDLORDS WRITTEN APPROVAL.