I screen pretty well and my tenants tend to be fairly credit worthy so my policy has been anything before the 20th gets prorated.

Funding for these deals is as much relationship based as it is credit worthiness.

You could make yourself more credit worthy and get an outstanding deal on a property you already know everything you need to know about.  

Of course credit-worthiness is a concern that must be addressed.So I am offering this:- if the other family members pass the tenant screening, I will allow them to end their lease and I will set up the new one- if the other family does not pass the screening, I will ask the current tenants to either complete their 1 year lease or remit payment retroactively at a month to month rate of perhaps $200 on top of their regular payments.Thoughts?

I'd be curious to know his reasoning as he's a really smart guy.In my area, unemployment actually went UP; now, with the micro monitoring of credit worthy homeowners, this could avoid the problem.But in the grand scheme of things, is 7-8% unemployment really a depression?

Some, if not most will use a percentage of the rental income in conjunction with your personal standing.Also if you do rent it, hopefully it will be at top dollar.All this includes your personal info in regards to employment time, credit worthiness, etc.It is truly how well ($) you buy your property.I hope this helps.Big Henry

"However, current standards may be limiting or preventing lending to many creditworthy borrowers."

Ben Kahle - the way I understand it (as least as far as I remember since it's been 4 years) about the 50% LTV thing is that there was some rule that limited HELOC's to that amount for TX, regardless of other factors that you would think would qualify you for more (income, credit worthiness, etc).

My credit score is over 800 so I am very credit worthy.

Unless the rental income factors significantly as demonstrated by your tax returns and business model (past performance), I wouldn't count on it helping you get the loan.Those who loan money will be looking at your income history, credit worthiness, assets, and how much you are wanting to finance.