My second, and larger problem is thee should be no way they are authorized to spend $5,000 of your money without your prior approval.

The ducts may actually need to be cleaned based on the age of the home and prior care.

ANY lender will require that the property be in "tenant-ready" move-in condition prior to refinance.  

Reno should be done by June so I'll start about 6 weeks prior to completion date so I can get my money back and go do it again!

But if the plans can all be done prior to purchase and be shovel ready at the day of purchase you may be able to spend proceeds within the 180 days. 

I don’t see any mold from photos (just some water stains).I have no prior experience with mold.

My question is, in the event that the home fails FHA inspection or I decide not to proceed due to more repairs than anticipated, can I assign the contract to another investor -- prior to close -- who is not using an FHA (likely a cash buyer)? 

They have been tenants for over 4 years (prior to me owning the property).

Could I be entitled to compensation for a new roof since they did not disclose issues with the roof prior to purchasing the home?

@Issac San Miguel - yes they did, however; the actual costs are just so much more than expected.....I am still looking at ways to reduce cost and a prior post suggested looking at this as a rental vs a resale.