The flipper decided to save a couple bucks and have the demo crew demo the knob and tube by simply cutting it and removing devices but leaving all the knob and tube in place.

@Jon Holdman I have access to direct seller servicer (no overlays) guidelines and can deliver cash out's to freddie mac even for non owner scenarios, if the borrower has 1-4 financed properties since only Fannie does up to 10 financed properties.

Oh, and protip: bring a book, newspaper, or handy electronic device.

Freddie Mac's cap is actually six.

Fannie and Freddie both have 97% LTV options.Both also have 95% LTV SFR options.On top of that, Freddie Mac has a 95% LTV 2-4 unit option for folks starting out in their Real Estate Empire. 

Conventional loans are governed by Fannie Mae and Freddie Mac (if you recognize those names). 

She stated that she screwed up, and is terribly sorry, and not sure how this happened or how it was not caught by anyone....but that the loan product (Freddie Mac home possible) that they are using...went through everyone, passed underwriting, and then was selected for quality control and was noted that one of the home possible policies stipulates that:Ownership of other residential propertyThe Borrower must not have an ownership interest in any other residential property as of the Note Date, or the Effective Date of Permanent Financing for Construction Conversion and Renovation Mortgages, except as stated below.

If I had to guess, I'd bet its the device. 

To my knowledge the 1% loan programs were cut at the end of July this year by Freddie Mac. 

This device would seem to require WiFi, which I would not have at a rental property.