May not be legal, but doesn't seem like it impacts your situation here. 

Quote from @Raghavendra Jakkani: Yes, you should screen and approve every adult living in the home, whether they contribute to paying rent or not.

Got them approved for the rehab via our direct HM partner, but the refi after the work is completed into DSCR is the issue.

I was just approved for $235k on my primary home and I have no personal debt.  

I agree that the cost can be outrageous, and it may be worth it if they truly live up to their end of the deal with oversight, reviewing your deals, avoiding legal traps, yeah there’s a lot we don’t know starting out.

The money isn't legally yours until it's earned, which is every month when rent is charged.

If insurance approves the claim, I figure having the tenants cover the deductible would be fair. 

The good thing about househacking a legal multifamily unit is that lender allows you to use the vacated units of 75% market rent as an income to offset the potential current mortgage.

Nah needs to be 30+ apartments syndicated from a blind pool of investors with no money of your own before you turn 18 years old on a sub-to commercial deal skirting the lines of legality placed in an LLC INSIDE of a reverse S-Corp with dividend disbursements on a quarterly schedule of 10+%. 

On my transaction DLP (Don) approved the loan 4 different times for 4 different dollar amounts.