I am a landlord and my investment property is in the 1st stage of foreclosure. I am looking to reinstate it, but my tenants are refusing to pay rent until they find out what is going on. Can they withhold money? Can they live there rent free because of the situation? Please advise.

No they cannot. You treat them exactly as you would if the property were not in foreclosure. I strongly suggest you give them the proper eviction notice that is required by your state landlord tenant laws (https://www.askmehelpdesk.com/real-estate-law/state-landlord-tenant-laws-other-helpful-information-25845.html).

RickJ is correct each tenant has a contract with you and they are bound by that.

Yes, what they said above is correct, but what about your contract with the mortgage company? Why should you get free rent and yet expect them to pay. Isn't that hypocritical?

Yes, what they said above is correct, but what about your contract with the mortgage company? Why should you get free rent and yet expect them to pay. Isn't that hypocritical?