and was able to refinance almost all of the money out... the rehab went over due to some unforeseen issues (beware, this almost always happens, I have now found out).

Those were tough deals and sometimes impossible circumstances and some agents got burned and it impacted their careers.  

In these circumstances, it is better to work with them and allow them to move.

I know your initial investment wasn't one that you would have normally done, but the circumstances permitted you to do so. 

I don't know that it would fly with the section 8 folk- they probably have certain boxes they have to check, and heat pumps likely haven't made it onto their checklists.If it were me, and I didn't already have heat pumps, I'd probably go with baseboard electric(in your circumstance.

My only concern is, I do have a large student debt (due to extenuating circumstances, don't have the degree necessary to get a big check to pay it off).

I have told my dad that absolutely under no circumstances should he provide her with money to go to school.

Of course at this point I would be looking for an equity partner (most likely family) as I do not have 300k + to exhaust, but I am just looking for your thoughts on my circumstance.

But the circumstances are not promising either way.  

I can't imagine an insurance carrier covering a landlord under these circumstances, if they did I would think they would need to be informed of what's going on and agree to it, and with a higher premium for that risky time period.