I would definitely have a red flag raised for future dealings with this tenant if they didn't own up to it. 

I'm not sure what to do in this situation, whether to drop the deal and lose my earnest money or try to find another lender.

Deal Makers Atlanta is having a meetup tonight 7/25 in Newnan. 

Your dealing with the wrong carriers. 

Here in Upstate NY (Watertown)Looking for an REI Group or something close, whether it be virtual or in person (due to COVID)I do consistent deal analyses, trying to network with others on ideas on how to go about with these fixer uppers and potential Buy&Hold properties I’ve found already

The problem I see is the masses have not understood the advantage of purchasing a duplex.As far a Lennar is considered an entry level builder, I don't see that their neighborhoods in general have very good price appreciation, unless they are in a unique area where the location is exceptional.I think that prices are falling, and that you should be able to find a deal, the I-35 Corridor from  San Antonio to Austin is a very hot area.Here is an example of a property that was listed for $342,000, and the list price is down to $300,000, with a price drop of $20,000 on 7/29. 1261 Stone Rim Loop, Buda, Texas 78610, If you need any comps or info, just let me know, I'm a licensed Broker in Texas, and I have MLS access across the state.Also, I'm not sure if you know, but you can split your 1031 exchange and purchase multiple properties instead of just 1 property. 

I'm not sure what to do in this situation, whether to drop the deal and lose my earnest money or try to find another lender.

No, what's his deal? 

Hello,Trying to source deals, I've been reaching out to many RE pros in my market (Spain) and came to be in touch with a family office that offered to sell me, among other overpriced assets, the whole fifth floor - subdivided in 2 apt - of a building they're renovating in the city center. 

If you are looking for no money down deals thats where I would start.