Here is what I would like to see:a set of exterior pictures incl all 4 sides of the house, the front and back yard and the garagea picture of every roomseveral pics of kitchen and bathroomsfurnace, AC, water heater, electric breaker panel and electric service outsidebasement walls, cracks if any, water stains, any puddlesa close up shot of: a sample window (the frame, not the glass), flooring, siding, roof shingles -  if possibleanything else that needs attention or is broken (crumbeling chimney, a huge fallen tree, water stains on the ceiling etc)Better to take the pictures with an actual camera with a real flash, cell phone shots are usually not good enough, because they turn out too dark and don't show details.

She made some excuses about a misunderstanding about the payment to the Electric Utility company but it was BS.

Normally HUD will list the types of mortgages the property qualifies for in the listing description.The property condition report will provide info on electric systems and if the plumbing held pressure.I list HUD homes in MA and those disclosures and reports are available on all my HUD listings.If you have any other questions about purchasing HUD homes let me know.

The upper blue collar (plumbers, AC, electrical) are easier - "make ready" specialists working flooring, paint, and basics are tougher. 

Every lot is different, the property may be fueled by natural gas, propane, oil or even electric heat.

If you are on a well, there shouldn't be a charge for water use.The water heater will use electricity or gas, which should be metered for each unit.

If the plumbing, electrical, structure, foundation,  etc.. are not up to code, then what will it cost to bring it up to code?

@Terra SpinoThats actually good news they have ceiling tiles if they actually end up having to put the drywall up to separate the units, it will be much easier to deal with the electrical fixtures in case the drywall is required.  

Usually, with adding the proper windows, ventilation systems, access control systems, electrical and plumbing, you should be able to have the unit re-inspected and approved for occupancy.

You can see how much a 1-car garage vs a 2-car garage affects appraisal, granite counters vs no granite counters, etc.For example, in my market, granite countertops are a $5,000 bump in the appraised value.The inspection is more geared towards finding what's wrong with the property (what's not up to code, safety issues) and making everything is in good condition and working as it should (electrical is wired correctly, plumbing drains well, no mold or termite damage, structurally sound roof, etc.)