I have the same format and I am finishing my attic this winter/spring.My thinking is that my property should appraise for more than this comp which would give me somewhere between 14-18% total equity.I could pay down the difference and hit 20% and refinance to get rid of PMI which justifies the higher interest rate.

Spend your time learning real estate instead of the lending rules and regulations.

Agents love to bash Zillow because it threatens the 5 - 6% commission that was justifiable only  prior to the internet age.

The missing windows and walls and graffiti throughout must have been mistaken for artistic enhancements of the property since there wasn't any other way to justify a higher number.

Is this possible for a judge to simply rule that a 1st owed over a 100K automatically has no right to their funds because they have failed to act?

No getting around their rules as they run a tight, but slow ship.

And ones that come even close to the 1% rule are even harder to find.

If you are purchasing commercial property in DC I don't need to go too far out on the limb to say without a doubt that this investment will be large enough to justify getting an attorney involved to prepare the LOI and PSA. 

The judge will rule in favor of the tenant.

According to the IRS as 'Disqualified Person' you are forbidden from providing good, services or facilities to the qualified plan and you clearly violated this rule.