Tenant is four months behind and now my homeowners insurance is demanding a roof replacement. Advice?

I’ve owned my home in Washington DC for 6 years. After purchasing I made some upgrades, including adding a half bath. Turns out the permits were not pulled for the half bath. I am just finding this out.

I went through a bad break up, job loss, and have been dealing with declining health, including a mysterious skin condition that has affected my ability to work in my job field. I have been unemployed for the last 10 months.

I made the decision to try and rent it out to help cover my expenses, but the tenant has also experienced job loss, and is now 4 months behind on rent. It is extremely difficult to evict in DC, and the process is long and expensive, so I’ve been working with the tenant. They will be starting a new job next week, which should be able to cover the monthly expenses.

I have 15 days to come up with 4K, to avoid foreclosure, which I was confident I could accomplish, until I read an email this morning from my homeowners insurance stating they took images of the property on a routine inspection and found the roof had to be replaced completely by 5/5 or they will cancel my policy.

I have never heard of this before and am totally distraught over it.

Now I’m looking for hard money lenders for a fix and flip, but I’m not sure if that’s the best option. Not sure if I getting an agent and putting it on the market as-is will help. I’m afraid the half bath situation will make it hard to sell.

I fought so hard to buy this home. It’s my first home and I put my life savings into renovating it and trying to maintain it for the past 6 years. I don’t want to walk away from this with nothing.

The current loan amount is 245k and the estimated vale before taking the upgrades into consideration is 350k. With the upgrades, the comps come in around 380k.

Any advice would be greatly appreciated! TIA