Perhaps, it is best that we terminate the lease because I can’t continue accepting late payments until the lease is up.  

This would allow me to create an additional bedroom and potentially live in the basement while sub-leasing the first floor.

You then pass the $35 per month cost onto the tenant and all future leases.

If in Texas, a lease purchase option longer than 180 days without consent from the lender to receive payment from the tenant/buyer is not possible.Also, you can assume the obligations of a VA loan -- it is a non-qualified assumption - meaning the lender is not qualifying or approving of the assumption. 

I wonder going forward if you can have in your lease with new tenants .. have them sign off right then there intention to buy..

Ground lease?

i.e. did you sign leases personally?  

Or perhaps you’ve found success with other strategies like lease options?

On the flip side I've seen neighborhoods where we manage multiple units and the house is leased in less than 2 weeks.

**Lease and HAP Contract**: Once the property passes inspection, you can sign the lease with your tenant, and HUD will set up a Housing Assistance Payment (HAP) contract with you to begin rent payments.