Earnest Money Question/Suggestion

[David Thomas]

Looking for thoughts, experiences or suggestions:

First time investing in a neighboring state. Put 10k EM down on a single family home with intent to use as a STVR. 21 day financing contingency. EM went hard on contract effective date with exception for the financing contingency. Several days post due diligence period we learn that the county won’t issue a permit to use the home as a STVR - however there are many homes around it that are being used as STVRS for many years but now are being told they are not authorized to do so.

Loan has been approved and I have notified the lender that I will not be able to use the home as a STVR as originally disclosed in my loan app. They won’t issue a denial letter bc even without the anticipated rental income I still qualify.

I am suddenly in the need of a replacement vehicle. I can get a quick non-collateralized loan via LightStream that will throw off the debt to income ratios and hopefully trigger a denial letter thereby tripping the financing contingency clause resulting in a return of my EM.

Anyone ever been in a similar situation or see any negative ramifications?