"the pressure temperature relief valve output should always be directed outside the building and downwards, about 6 to 12 inches off the surface of the ground or flatwork concrete"
NJ happens to be very,very lax in their plumbing codes and one if quoting a code should consider either the National Board of Boiler Inspectors (NBBI) or the ASME.
Having any safety or relief or T&P discharging out side is ludicrous for the following reasons
1- During the winder months the pipe can be so cold that any trickling of water will freeze and render the valve useless
2- What happens if the snow goes above 6" -12" then the discharge is hindered and now instead of relieving properly you now lost the only safety device on the heater
3- Having a valve discharging outside may go undetected and thus no one will know there is a problem for some time
4- If a child should be playing near the discharge piping and it does discharge because of excessive temperature (210 DEG F) there is going to be criminal charges brought against the installer and the home owner as NJ sets up minimum codes at best.
Never ever take the word of a home inspector as gospel as many do not have the formal training needed to give any advice on electrical - plumbing or heating as these are technical professions
The proper discharge of a relief / safety, T&P valve should be 6" above a drain and as few 90's as possible and if no drain is available a sink can be used with an air break .
There is more on relief /safety discharge but a DIY forum is not the place to go into to much detail
