Like @Kevin Sobilo said, cover your bases.

The decision to go thru under terms different than one based their offer on is a business decision, not a legal one.  

Now if the deal didn't close, I would still get my due dilligence fee; however, that's based on a broker agreement and funds being released from escrow.

Here's the latest market report (based on single family homes): Mortgage Rates:30-year conventional rate today is 6.61%30-year VA rate today is 6.14% Median Sales Price:July: $487,483August: $480,000Sept: $490,000 New Listings:July: 2,068August: 2,198Sept: 1,910 Median Days on Market Until Sale:July: 14August: 16Sept: 20 Months Supply of Inventory:July: 2.8August: 3.1Sept: 3.1 What does "Months Supply of Inventory" mean?

Loans are underwritten by Fannie Mae’s Desktop Underwriter (DU) or Freddie Mac’s Loan Product Advisor (LPA) which based on the loan application will decide on reserves needed. 

I like simplicity, which this does not seem to have, based on their website.That being said, as others noted, I would look at what your goals are first.  

My tax person says I can deduct a % of the repairs I've done based on the SQ Footage of the basement unit.

Basing estimates of rents and expenses based on my existing knowledge of local markets.

Here are the Positives:Upfront Payment: The tenant’s offer to pay the full year of rent upfront, along with the deposit, shows a commitment and provides financial security for you in the immediate future.At least She was Honest in Her Communication: The tenant has been transparent about her situation, which can be a positive sign of reliability and sincerity.My Negative Concerns:Her Future Financial Stability: It's only a one-year lease, if her medical condition and financial condition should worsen (Heaven forbid), you may have to face her wanting out of the lease earlier than the 12 months and eventually you may be faced with having to decide not to renew the lease (after her 1 year contract is expired) based upon the sad news of her condition becoming worse, (Heaven forbid).  

Hey Bryan, If you are in search of a non traditional business purpose loan there are DSCR based 2nd Mortgages (Must be an investment property) Or Hard Money 2nds on Primary Residence (Funds must be used for business purpose).