I could see how you might be hesitant to apply for the permit on the off chance you might be denied.

It seems that a rental license for my property will be denied given current single-family zoning (RSA-5).

The co signer is the financial guarantor of the transaction so go after them too.We denied an applicant recently who had moved out of a housing unit leaving his kids (in their twenties) there.

Your credit report , financial statement and the real estate deal will be priority to them in rejecting or approving your deal.If you get denied for whatever reason and you go to your local branch with the bad news, they will simply apologize to you for not getting approved but cant and do nothing to overturn that decision.

I believe her and her husband are getting unemployment and have received stimulus checks for the family however she’s denying it.

Perhaps they hoped he’d be approved for a transfer and it was denied, or they always intended to take advantage of this benefit to secure a short term rental.

But at the time insurance company denied the claim, thus one of my uncles suggested to contact the Alliance public adjusters, who will guide properly.

All I did was let the loan officer know I was interested in a HELOC for the max amount, filled out a loan app, supplied all the necessary documentation, and then received a form letter in the mail a couple months later informing me that my app was denied.  

I wouldn't worry too much about the tenant, since you can deny their lease renewal. 

Law isn't my strong-suit in the subject of real-estate, but given the above scenario, I do not believe that you can deny all 20 'Bad Tenants' if you don't find even a prospective 'Good Tenant' either.