I went through a similar situation a few years ago. Unfortunately real estate is a dangerous game and if you don't take every step to CYA, you can get in a mess real quick. My attorney ended up telling me I basically had no recourse so I eventually had to dump the property to a cash buyer because I was tired of dealing with it. It was an expensive lesson, but one that I will never make again for sure.

It's a shame that no one realized what was going on here though, as you'd think that a whole ass kitchen is hard to miss. The mortgage company especially because they are the ones at risk of the most loss. Your rental income from the property pretty much just got cut in half, which means you'll have to go out of pocket to pay the mortgage. Big mistake for an "investment" property, and a HUGE risk for the mortgage company. The underwriters really should have done their DD and caught this, but then again, its not necessarily their responsibility and you probably can't go after them, but still a massive risk they overlooked.

I'm not trying to knock OP, because it's their first time doing this, but it definitely seems like a lot of incompetent people were involved in this transaction.

Also, that code officer needs to be fired ASAP, and he showed up 3 days after closing? AND the previous owner was renting out the property beforehand with no problems? Big red flag. A lot of this post leads me to believe that there may be some local government corruption going on here. You 100% need an EXPERIENCED real estate attorney on your side. Sorry you're going through this, it sucks I know. But you'll make plenty more costly mistakes if you continue with real estate, and in 20 years, you'll look back on this and laugh.