Everything they had build, in terms of their REI Portfolio, Bank Account Balances, their Personal Residence, etc. was lost, or they filed bankruptcy.

The next time you apply for a mortgage (same lender or different lender, makes no difference), underwriting is going to look at the file and apply a "BS Test" to see if it looks like you did indeed live there for that year you promised to. 

It was originally a duplex, but additional rooms were added.

Prior to applying for any additional business licenses in the City of Philadelphia, you will first need to obtain an Activity License.

Credit card debt is around $4k and we have one car payed off and one with about $10K remaining on the loan.We make enough to make the minimum payments on everything and have maybe an additional $1.5K a month.A lot of the suggestions in the student loan posts were to move into a duplex and rent the other side out.

However, the agent said that it can be legally a 4 unit home, with an additional unit in the basement.

When you hold a {rental} property in a corporation, income is taxed at the highest corporate tax rate - which increases the benefit of claiming the CCA deduction each year and mitigates the punitive aspects of the recapture.In addition to how you hold property, the length of the hold will also factor into whether you claim the CCA deduction; claim the deduction for a few years than stop; or do not bother to claim the deduction at all.  

In your example an additional 83k in cash on top of the down payment.

Show proof of funds for the purchase price, rehab cost, and additional funds for overages.

If payment is not made by grace period, say the 5th, landlord files on the 6th.