We Need Guidance ASAP!

[Marcel Miller]

 My wife and I are both veterans with disability ratings (100 and 70).  We own a single family in Texas which we have lived in since 2018 and we did a Streamline refi on (Dec 2019).  Our daughter (and is paying rent that covers the mortgage) moved in with us January 2020 and we began traveling a lot.  Although we consider this still to be our primary home we are in and out for long periods of time.

We found a home in Minnesota (Duplex) that we decided we wanted to buy. This home is set up with one unit upstairs and one downstairs.  It also has a detached garage that we intend to covert to a livable space and ultimately declare as our primary residence while we continue to travel.  Really a space to call home and leave our stuff.

 So we got pre-approved, made an offer (with an earnest money deposit of $1000) and we are days away from the scheduled closing date.  Here is where we are starting to have issues.  To the point that we are convinced we are going to lose the deal.....

The lender (on the duplex) is signaling that they are concerned that we will not occupy the home. We have signed the declarations that we intend to do so. They have asked the the current owner issue a Notice to Vacate (NTV) to one of the tenants. One of the tenants has a lease that expires in September (technically 64 days after scheduled close...but I had to argue that this was within VA guidelines as it specifies a date and the date is reasonable). Even with the signed lease they want the NTV issued and signed. The seller is not comfortable with doing this...especially under the pandemic and the current non-eviction status of the state of Minnesota....This is problem number one.

This is problem number two; The lender is also asking that we provide proof that the lender on our home in Texas does not have an Occupancy requirement. When we purchased the home (in Texas) we had no intention of moving or renting it and as such we simply did not know about things like; refinancing with a VA Streamline removes the occupancy requirement. Having said that when we signed the refinance documents we signed a declaration that did NOT remove the occupancy requirement and in fact it requires us to remain in the home for one (1) year after close. So we are unable to provide a document to the lender for the duplex in Minnesota.

So I am trying to figure a way forward here.  Figured I should ask for help and guidance with this.  

-Should I simply walkaway from the property in Minnesota and lose the earnest money deposit, costs of the home inspection and the appraisal fee (which was paid by the realtor as a result of a negotiation we had with him over his commission and I assume he will want to be reimbursed for if the deal falls apart)?

-Is there a way to get the lender of the home in Texas to change the occupancy requirement given that IRRL's (VA Streamline) are supposed to trigger this?

-The issue of the lender (Minnesota home) requiring an NTV to be issued on one of the tenants is a firm roadblock.  If the other issues can be overcome....should we consider a change of lenders?  The seller has advised that they are open to extending the closing date another 30 days if need be to accommodate this option.

Thanks in advance for any and all advice!