The house just needs to be inspected to ensure it meets Section 8 standards. 

Does anyone here have experience or advice on section 8 (screening/tenants/process/inspections, etc.)?

Because of that the credit unions and banks in our area won't touch it and the only one willing to is asking 15% down, the loan is still contingent on it passing an inspection, (which as I mentioned, is impossible since the seller won't turn the utilities on). 

May I suggest that you research this particular property on the City of Chicago website entitled "Building Permit and Inspection Records" at this link:   https://webapps1.chicago.gov/buildingrecords/Good luck.

It's better than having two tenants that lie about it and then smoke inside.If you're worried about it, wait a month and then hit them with an inspection to verify.

I personally advise against buying a property sight unseen and recommend that clients come out to see the property once it is under contract, and scheduled for an inspection.

Just yesterday, I inspected a 31-unit building that is 50% occupied.

As long as everything checks out you could offer full list subject to inspection of property and financials and look for something out of order.

I keep in touch with the guy I sold it to (10 years ago) and he has had no issues with it ever since.If you are unsure, you could always get an inspection by a foundation specialist BEFORE purchasing.

Also, see if the inspector could explain or walk you through what he or she does during their inspection or what they look for.