You do the quick fixes to comply with your state Habitability laws to make the unit safe under the law and your obligations as a landlord in your lease; not to please your tenants.The second deal you are going to have to deal with is your tenants and their compliance with the lease.

Compliance to the government was a cost of doing business then, as it was in the mid aughts.In the end, I'm so frustrated to have the financial meltdown blamed on lenders and "greed". 

I handle all of the design, compliance, building department plans reviews, etc as a service on projects we do. we are more of a boutique development firm for infill lots for single and multifamily. 

My thoughts are is that if someone wants to wholesale, they should get a real estate license and then they'll be in compliance with the statute.I'm a broker and I am subject to the real estate licensing laws that are intended to protect the public.

Given that neither are motivated by guilt or threat of no desert, look for motivating factors that escalate compliance.

So she is telling you that probably no one will look closely enough to determine that you are lying on your application.The problem there is that while all she wants to do is close a loan and make some money, there are compliance people above her at your bank that DO care.  

I work with a very reputable & compliance driven Servicer of owner finance/long term escrow/seller carryback mortgages. 

I can't say why IPN doesn't report payments to the IRS, but Cozy does so in compliance with the IRS's guidelines.

However, it may also be possible to address such issues to bring your housing arrangements into compliance with code - the curtain separators may need to be replaced with something a little more "wall-like".As I was rereading this thread, another question/idea came to mind.  

Even if you have this exemption you're still responsible for the loan originated being in compliance so it's best to see a licensed mortgage originator.