Tenants leading him right down there is not ideal but the building department/inspector does have a right o inspect any homes where they have justifiable cause or safety or heath concerns. 

And what kind of contingencies should I put in there (passing inspection, appraising at a certain level, etc.)?

Make sure to find someone that has a lot of knowledge on the housing/rental market, experience with the building codes, inspection/permit process and programs tenants will sometimes use.

Before the virus hit it was really tough to get into a multi family with any sort or contingencies (financing, inspection, and the like).

I will also have the inspection done this afternoon.  

Can I negotiate to decrease the price based on work to be done after inspection?

I would attend local section 8 meetings, call them directly and ask for their rental comps, inspection criteria, and any other useful information. 

There are so many hoops you need to jump through and so many inspections you need to pass in order to get paid by the program.  

You'll never get the contact info of appraiser because that goes against bank rules, but you can group email the loan officer to the property manager in a thread to schedule time for appraiser to do an inspection & take photos of occupied property.Certain documents require access to a printer so you need to handsign & scan documents & email them to bank.

Looking at the analysis, a) I would not self manage any investment property, unless you like doing that work plus the headaches and stress b) you did not budget for a home inspection or the cost of upfront repairs or maintenance.