Financially it's almost always better to leverage but less so in higher interest rate environments when there are good investment alternatives, and not everything in life is or should be done for purely financial reasons. 

We continue to pursue alternative refinancing options and anticipate having a new loan closed within the next six months.

If building a relationship based on trust and offering multiple alternate solutions to prove my identity is demanding and "beotchy" then guilty as charged.

I guess I’m looking at alternatives options, if this is to hinder me acquiring in the future  

Recognizing that I'll need to discuss options with an attorney, I'd like to have a few alternatives to bring up and talk through with them.

Another alternative is creating some incentive to bring on an experienced investor and maybe work this stuff over the years to possibly navigate the pain.

The alternative is moving to somewhere cheaper or find a higher paying job.

But, it's not a no-brainer better alternative to renting. 

Alternative plan would be to use a  3% down conventional loan. 

Are there private money lenders who do cash out refinancing deals as an alternative?