This could provide Virginia residents the opportunity to rent out parts of their home as a matter of right, as opposed to having to undergo a permitting process with county or municipal zoning authorities.

What is the limit on repairs they can authorize before getting approval from you?

He suggested traditional lease option terms, but he offered too much for the home and it's far from my typical area.Even if this isn't a deal that works, the individual seems credible and is probably pretty responsible-might be a good fit for another property.  

You don't need a small claims court judge to permit you to file a lien though.I must warn though if this guy hires an attorney, everything you've done will be scrutinized - they will question your authority to act on behalf of the association (you said you appointed yourself) usually Associations don't allow for that. 

Good news if you're thinking about renting out a condo or HOA bound home and ran into association troubles. 1.House Bill 684 pertains to the Condominium and Property Owners’ Association Acts and makes the following changes regarding the rental of a privately owned unit: First, associations can no longer prohibit the owner of a unit from renting it or evict the owner’s tenant; Second, associations may not charge any fees in excess of $50 or charge any kind of deposit, security or otherwise; And third, requires the association to recognize the owner authorized agent without needing the power of attorney, as long as the agent is licensed by the Real Estate Board.

Beyond just the local authorities, you may be committing mortgage fraud if you claim "illegal" income when you go to refinance.

"Once I started making headway with HUD, the Coast Guard claimed they had the real authority.”

When there is a problem I enlist their help in correcting it: I have them call my local handyman for minor issues (he has standing authority to spend $150 without calling me) or a specialized vendor (say an electrician) for other types of repairs and maintenance. 

In Oklahoma you need to talk to the zoning authorities.  

This falls back to the AHJ (authority having jurisdiction) typically the town Code Enforcement Officer and/or Fire Marshall.