Considering buying a single-family unit for mid-term rental to traveling nurses, etc.

She is now looking to sell, but her daughter lives in the home and basically told her mother that in order to get her out, she would need to evict her.

You'll have everyone & their mother give you their spot via association.

Most insurers viewed it as a nursing home quoting rates of $10k annually for a home valued at $129k.  

Fully finished the basement area as mother-in-law unit.

@Allyson Mitchell, I just helped a travel nurse in a similar situation as you buy a home that was turned down by a few other lenders.

I was also a travel nurse. 

For example, a 1/1 occupied by a travel nurse who is gone 12+ hours/day will have much lower utility expenses than a 3/2 occupied by a family with one WFH spouse who is there all day.

Is there a market for furnished mid-term rentals (i.e. travel nurse, insurance company, corporate housing) where you can generate above market rent and positive cash flow?

Try to position properties around Hospitals (teaching-hospitals work best) as these are great locations for rent by rooms for nurses and students that only need a place to sleep and cook for a couple of hours and then get back to work.