Assuming conventional financing is not an option, you could reach out to a private lender (family and friends) to fund the rehab.

Networking with industry experts can provide valuable insights and personalized services.

Find one in person.

Quote from @David Eyal: This is actually very simple: don't get involved in personal issues.You offer them a renewal.

Whenever someone files for bankruptcy, there is an automatic stay of all legal proceedings against that person. 

Under the FHA rejecting a person for the ESA dog is a form of discrimination against those with disabilities.Your post suggests that this person has passed all your screening criteria except for the ESA dog.

Personally, I'd never buy the biggest house, or the most expensive house on the street.

If the home doesn't sell for enough to settle the entire balance, the FHA insurance fund (assuming it's an FHA HECM, which it likely is) makes up the shortage.

That will be your main sources of funds...and typically you and your friends will need to invest $50,000-$100,000 per person. 

I have locked up one deal off the application and have offered in person on 2-3 other deals.