Oh, that a primary residence mortgage application could be so easy...On a separate note, the other two said they would only lend business to business. 

I modified my rental application using them.  

I think the limits only apply to what the Section 8 program is willing to pay, not what you can charge.

Make the option money applicable to purchase price if they buy, but non-refundable if they don't. 

With the limited info that you provided, I personally would keep it in my portfolio as long as the unit is cash flow positive and the outlook for the location and overall rental market is positive.  

We've mostly used 20% - 25% down payments on 30-year fixed to lock in low rates for 30 years, but this limits our purchase power.   

Additionally, the limit for VA loans in much of the country is less than $500k (like $437.5 or something).

If their maximum bid instruction is acceptable to us, we tell the lawyer, as a courtesy, if we plan to bid higher than their bid instructions, and we immediately bid a dollar higher than their minimal bid limit when the sale comes up and the lawyer representing the foreclosure entity bids the minimum amount to start the sale.As another courtesy, I also talk to other regular investors at the sale whom I have done business with or whom I have another business relationship.

What fees are different or applicable when a wholesale deal is happening and a double close is taking place?

From what I have learned so far, with my limited experience, you are accounting for a potential protracted vacancy, and should consider allocating some capital to update units when they turn over.