@Hari Mann From your first post it sounded to me that you purchased a 35 unit condominium complex and that you are treating the property as an apartment building? 

They treat lending like a production process.

The best method I have for screening is sending a form directly to the medical professional who is treating the patient with the animal.

Credit rating, criminal background( check with state laws on this).Pets vs. no pets, list of dangerous breeds not allowed.....We have list of qualifications that we give to prospective tenants BEFORE they fill out an application.This way it saves everyone involved time and money,and you protect yourself by treating all interested parties with the same guidelines.

Congrats on taking action.One thing to consider when talking with lenders, most will treat you like an owner-occupant for qualification purposes.  

On trend analysis he calls out a plumber to unclog a line at the same unit, instead of looking into why he needs the sewer line snaked monthly.With periodic, there is zero emphasis on annual HVAC checks and other maintenance items that any owner would consider part of management duties.I have brought this up with him, asked weather he treats his properties the same, and was told "I take care of the issue when it crosses my desk."

I treated it like a little farm area, for those of you familiar with the term.

However, in your case, this is one physical property, so maybe you can treat both Unit A and B as a single sale for the exclusion purposes and apply full exclusion to Unit A and also partial exclusion to Unit B.

Can be taken on Sch E but if he is treating rental as not trade or business and such then ask him to pay yourself a management via sch C and take home office deduction against that income. 

If you aren’t comfortable pushing back, you can always ask them how depreciation is treated before getting into underwriting.