Should we insist she complete a formal application now that one of the breadwinners is leaving?

Insist that tenants pay by check.

If you insist on turning into a commercial road instead, know that your commercial Lender WILL charge a higher Interest Rate, and WILL demand a much higher deposit, and WILL demand that the loan be paid off quicker than your FHA-approved owner-occupier Lender!

Then the seller is stuck with no cash flow.The bigger question is why are you so insistent on the property being vacant?

You can insist on underwriting feed back on the issue.

You should insist on a brand name with a good history like LG, Mitsubishi, or Fujitsu.....Or you can build ducting chases either outside or inside the walls to run the ducts.....?

Her insistence on getting your deposit without showing proof that she has the house under contract just confirms it. 

I insist all applicants use our online application process (via Buildium, our property management software) since that means I get every blank filled out legibly on the application, and the app fee gets paid via ACH.We use a google voice number forwarded to our cell on our signs and a web address, and refer everyone to the website for a property video, the application criteria and online application. 

However, he has insisted on an hourly rate (which in hindsight I should not have agreed to) and keeps expanding the scope of the project, which admittedly was ill-defined by me to begin with.

He insisted that this was possible and made a commitment to me while shoving the buyers agreement in my face.