If s/he'd been putting aside reserves, the repair would have been covered by funds already in the bank. 

The left over would cover the difference in monthly payment for about 2 years.

Specifically payments to companies linked to promoters to do the work and the rates they charge.

Since you won't be able to recognize it as a valid rental if you're charging under market rent and you also expect to be covering any house expenses that are outside of her budget, this seems the best choice. 

The plumber insists that this is definitely a city issue, but I’d like to hear from others who have dealt with similar situations.Would the city reimburse or help cover part of the expenses for the secondary cleanout?

We would certainly want to have our basic needs covered, and the occasional emergency, and be inflation proof.

Hey Natalie if you're set on holding onto the property I have a great property manager I use for my STR's that also will cover MTR and LTR's.

It is a standard conventional loan and was offered as a promotional financing by builder at the rate of 5% for investors. 

Our agent negotiated us a credit for one aspect (floors) but given the true work that really needs to be done is there anything we can do at this point... like arbitration to cover costs of actual work that needs to be done.

Current HELOC rates are typically 8-10% depending on your credit and lender, though some banks offer promotional rates.