Knowing that you couldn't accept section 8 because you didn't have a permit and knowing that new york and many other areas now require landlords to accept section 8 - well moreso that you cannot block section 8 - why didn't you let them apply and just deny them with no reason? 

I used a 1st lien HELOC to pay off a duplex, now that I have like $5k left, I applied for a construction loan but I was denied cause my DTI is too high.

@Tina Kapur—First and foremost, you can NOT deny a tenant because of a voucher—that's a big no-no here in Chicago...now, of course, you can deny the tenant for other reasons like credit score, income, etc.We usually do 2.5X income w/ a 600+ credit score in the nw side of the city.Section 8 has its pros and cons like anything else...the check shows up EVERY FIRST of the month like clockwork, but additional paperwork and CHA inspections are required.

If you use the damage deposit from a listing site, and they deny the damage, you may get nothing.

Hopefully you have other, better qualified applicants to go with or can deny this couple on something else (credit, income) so you don't have to deal with their nonsense.

Generally a tenant cannot deny you entry to fix a problem.

Quote from @Dan Denis: Is building better than buying ? 

Look up the situation the rapper Killer Mike went through when he attempted and was denied…it’s crazy he didn’t get approved cause his situation was BAD) so the fact that she was able to successfully do it meant that she was in serious, dire straits.

We know we could apply for a zoning change, but that process could/would take months and we are beyond ready to move onto our next investment.Has anyone else come across problems like this, where the lender is going down a rabbit hole and denying funds because of something that could possibly happen in the future?

Denying application because of pet is not about discrimination (man they abused this word so much), it's about who pays for the cleanup cost.