They were on a payment plan but have recently stopped payment, gone no communication and telling neighbors they plan on squatting thru December due to CDC guidelines. 

FHA does not have a provision within the 203K guidelines to allow a borrower to get reimbursed for money that they paid a contractor for work that is done through the 203K. 

Should I take a gamble? 

So, if we assume to costs for a bank to make a loan stays the same (since to be sold to Wall St. they have to meet the guidelines @Chris Martin referenced) and that the fees they make go up proportional to the balance (Look at your HUD-1 and see the number fees that are a percentage of sales), we realize that at a point, the bank would lose money on a loan.

Quick question in regards to lending guidelines so I don’t trip myself up down the road...When refinancing, there are seasoning period for certain things.

They follow their own guidelines and rates.

Practically, it's a gamble you may want to take in the situation where an eviction may take months in our current COVID-19 environment.

You can only qualify under very specific guidelines, so it definitely doesn't work for everybody.

These tools have up to date guidelines on what the banks will require.If you first start hitting a wall with the banks, try a down-payment of 20% or more.

Never hand over a key without the deposit (and first month's rent as it will likely be the day they are moving in).The CDC guidelines about eviction only hold if the person has lost their job or income as a result of covid.