If she sells the property before that date, she would not qualify for the full exclusion unless she meets certain exceptions such as unforeseen circumstances like job loss, health issues, or other qualifying reasons outlined in IRS Publication 523.Regarding prorating the exclusion, unfortunately, there's no provision in the tax code for prorating the exclusion based on partial years of ownership or residence.

DTI is a common challenge that we all face, however, it sounds like you need a lender that is going to help you look at the overall situation and give advice as to the best course of action.

I guess it happens, but strategic default is much more common.

The ones that don't are usually more investment-related and probably wouldn't issue credit cards anyway.

The biggest issue was having far below market rents when I purchased.

I also like that these newer homes attract quality tenants, I may be lucky but haven't had any issues with any of my tenants in these types of homes (yet).How did you find this deal and how did you negotiate it?

We will see what happens but I do not believe the law will end up being interpreted that way, I think the fact that you are marketing real property that you do not own without a license is the issue, what happens at the closing to me is irrelevant to the law itself. 

EDEN would like to pay me the previous 4 months' rent but I have to fix issues all the little issues in the house, such as fixing hole on the wall, changing the battery for the smoke detector....). 

A contractor can't see some issues if the services aren't turned on.

The issue that people keep ignoring is our uncontrolled spending and debt.