Documents you will sign after the Approval Letter is issued will include an Arms Length Affidavit which will state, among other things, that there are no undisclosed agreements and usually specifically that the owner will Not be allowed to remain in the house and/or rent it from you.

Try and get the lender to approve a short sale to you at the amount they owe, which may get them to work on it before foreclosure. 

As far as a cool off period no, asoon as the heloc is active you can use it, it may take a few weeks to apply and get it approved though.

Ask the PM to send you their documentation on potential tenants so you can have final approval.  

(we are making sure we are approved to refi before we sign anything)@Jeff Plair I wish ours was that low.

I read that I may be able to obtain HUD keys when I sign up as an approved HUD agent.

My approach, assuming the lease language is silent would be to require them submit an application and get his mother approved.

You can make your offer - but it will be subject to the lender's approval of the offer price.

Not a bid deal, an amount that most mid to large banks can approve on a regional level, so not a huge chain of command to go through and the holding costs for the bank will probably be more than that anyway. 

In retrospect we got lucky because the VA approved it even though it was basically a cosmetic gutter with great bones and a FANTASTIC neighborhood.My husband and i completely fixed it up with a little family help in the beginning.