The only out of the box solution, is to use her deposit this month, and increase her rent $50-100.

You have to have a system set up for vetting guests, creating leases and collecting deposits and rents.

Probably the same for most BP members.Both of our bankers $25mm and $1.5mm Fed loan Cap rate said their customers are out of Covid Government money deposits, thus they, the banks, are not pushing loans now. 

The lender is stating the following: "we would require a mortgage on the lot in the amount of $90,000.00 when combined with your $50,000.00 deposit would be $140,000.00 down payment apx a 20 percent down payment"Is he saying I need to find another $90,000, or that he will act as the mortgagee on that portion as well? 

Discover, for instance, will deposit the money for your "balance transfer" directly into your checking account, and often has specials for 0% financing for 12 months with 3% up front transfer fee, or 5% financing for 18 months with 0% transfer fee.

Think of all the things that could go wrong and see if the lease addresses them: unauthorized pets or tenants, early termination, security deposit, lease violations, late rent, eviction, lawn maintenance, parking, etc.5.

Sell, pocket $200k in equity, appreciation since they bought it, bank 25% for a new deposit in a year once they repair credit, buy two new second hand cars because they need them, pay off credit card debt, put a little extra to the side for increased rent payments for next 12 months, and reorganize to buy in 12-18 months... now they see the light, a chance to move forward, to not stress, and they're lucky the market increased so much... but if they struggle to keep it, struggle to make payments, then 10 months realize they need to sell, would they have as much equity, maybe, maybe not..  

What happens to original security deposit from original 12mo lease?

If you send the security deposit disposition to the address they rented from you with ADDRESS SERVICE REQUESTED written in the area between the address block and stamp you'll get a postcard back with the details if the mail is forwarded. 

Tenant decides not to pay and use security deposit for last payment (not allowed).