First Duplex Under Contract, aaand There's A Problem!

[Mike Olson]

Alrighty, I'm in a bit of a pickle folks. I went under contract for my first Duplex yesterday, with the intentions to house hack. We can get into the numbers further into the post if anyone's interested, but the reason for this thread isn't necessarily the numbers. 
The Situation: After consistent, persistent persuasion tactics I've convinced my wife that house hacking is the bees knees. So we've found a duplex that we feel meets the criteria for our first house hack. We played the offer... wait... counter... wait... game and finally went under contract on Friday, Feb 3. It's a 2 bed 2 bath per side brick duplex. Good neighborhood, nice curb appeal, all that good stuff. One side is occupied and the other is vacant. Perfect for an FHA loan, being that we have 60 days to occupy the building from closing. We decided to go with the FHA. The current tenant has been there for over 5 years. She pays on time and keeps the place very nice. Now here is the problem. When the sellers agent (who is also marketing the vacant unit for rent) met with the current owner to review and sign our offer, she also brought a lease agreement as well as a new tenant she'd found earlier this week. The new tenant signs a 12 month lease with the owner, then the owner signs and accepts our offer two minutes later. Now, two important things have just happened. 1. The sellers agent has made a few dollars for finding a tenant while acting in her own best interest. 2. My 60 day window to occupy the property is now in jeopardy (I think) and from what I've been told I will have to honor both current leases which will basically disqualify me from using the FHA for this property. The numbers are good, not great, so I wasn't really wanting to put 20% down- but I can if I have to. The 3.5% down is a fantastic way to get into this deal and keep my cash for the next deal. And finally the question: Are there any options for me to keep the new tenant from moving in next week? Or any other creative options? Hope my story makes sense. Im not really a writer. Anyway thanks!

[Ryan Murdock]

Was having that unit vacant at the time of closing a contingency of your offer and purchase contract? If not, it should have been. 

Was there a stated financing contingency? If your contract specifically stated the deal required you be approved for an FHA loan with only 3.5% down and circumstances now do not allow you to do that you may have an opportunity to get out of the deal or at least have some leverage to renegotiate. I don't know how contracts read in Virginia.

I'd ask if the seller or listing agent can contact the new tenant and see about cancelling that lease. The new tenant may be accommodating since they haven't moved in yet. If not, depending on the deal, maybe the seller would pay them a small fee for their inconvenience?