One way to protect the bank is to heavily scrutinize applicants when they want to bring very little cash to the table. 

I never turn my back on applicants..I always walk behind them, show in the during the daytime hours, get there a bit earlier than the appointment to open the door & turn on all the lights.

Sometimes with our younger applicants they will have 0 credit, which just means they do not have credit cards in most cases which is not necessarily a bad thing.Does your report provide specifics such as derogatory credit and non-derogatory credit?

Not bad.Until a buyer walks in and sees poor cut-ins, streaks, uneven applications, etc., and they decide that because of the quality the house is worth more than $2000 less than market value...And, if you can teach someone to paint like a professional in an hour, you could be making a lot more money teaching than flipping houses! 

If your prospects for getting more qualified tenants are reasonably good, I would reject their application.  

SS applicances, maple cabinets, granite countertops, new moldings and casings throughout the floor.

Even when you have worked out your own 'rules' that should be applicable to your market, I would still recommend that you NEVER multiply out that percentage to arrive at your 100% Maximum Offer!

John's hard money lender had a rigorous application process and none of the deals I submitted were approved.

It just says as applicable by local laws.

I only had to put down 5%, didn't need PMI, closing costs were minimal, no application fee, no appraisal fee, no credit check fee...and no junk fees.