For example, Finance of America has their own calculation for debt coverage that may limit the amount of leverage they will lend to.Best of luckStephanie

I only had a certain amount of money to invest from the HELOC (75k), so my purchase price had to be under 250k with a 25% down payment.

My final updates is that the city said they would need to do drilling and add meter hardware because of the position of the main line in the culdesac, probably amounting to, say, 8k.

I would offer them double their current rent amount, so they have enough to cover a new deposit and have some play money - which is the incentive.

This will only work if you get a deep discount since it hasn't been selling at the $240k amount.

You only pay interest on the amount used and you can use it on a ongoing bases. 

Should i encash the balance amount shes sent me?

If you are going to include utilities in the rent you have to increase their portion of the amount since tenants are notoriously wasteful when they are not paying the bills.You also need to see if you can find a market rent for your type of unit.

Outside of that I'm not too familiar with the loan process in regards to what amount of money would actually make a significant difference when getting approved. 

Do you have a payoff showing that $496k is what is truly owed including the deferred amount?