At the auction, the winning bidder only pays the lien amount and a high bid premium if he/she bids more than a certain amount.

@Jarrod EnglishThe option premium is what one pays for the purchase option.  

Wood 2x and plywood?

If you are a few points below market that will quicken your timeline, however, if you're at market value or aiming to sell at a slight premium you might be sitting longer.Every market - even within one county can be wildly different - so YMMV and it's important to take the micro market into account.

In my neck of the woods, the housing authority sends an inspector out to every section 8 property every year.

Claims on small items can (but may not always) make it more difficult to collect on large items and/or to get the policy renewed; small claims may also put upward pressure on your future premiums.

In the historic district the front windows must be all wood.

Unless you feel like you were negligent in some way, like the tree branches were hanging and maybe you should have trimmed them, or they were rotting or something...don't go searching for reasons for your premium to go up...my advice is to stay out of it. 

My lender is stating that they are using the base price of 172k as the purchase price and excluding the auction premium.  

I don't have too much experience with multifamily but would love to hear any thoughts on that strategy in our neck of the woods.