Goodmorning BP family- I have added an additional single family house to my portfolio so I am now house hacking two homes.

If it were a cash transaction I'd suggest joint tenants with you holding a 1st position lien for the proceeds you injected into the deal.

I was excited because the basement needed an egress window and I was viewing it as a potential additional room and house hack and future rental possibility. 

Does anyone have a suggestion or a recommendation?

It's possible the deceased father agreed to let her manage the property and keep the rent net for her troubles, but the title/ownership remains in him so his heirs would inherit it as a legacy.I suggest your friend familiarize himself with the statute of frauds which I believe requires agreements regarding real estate be in writing to be enforceable.

I suggest reading this BP article on the core 4.https://www.biggerpockets.com/blog/core-four-real-estate-team

They come back to me ignoring those suggestions. 

It tested low: Highest levels are .3, well below the 1.5 legal limit for contamination.However, it’s been suggested that I still might want to hire a remediation company to do HEPA-vac + wet wipe throughout the home.

Its a limited doc program  my suggestion is to close the land cash and refinance into multiple loan options and negotiate with at least 5 lenders and talk about terms. you may not even be qualified.

Thanks I would just suggest for you to do a deemed disposition of you have significant gains on the current primary.