Then, must wait while remarketing the home, go through the application process, and hope this person pays on time and takes care of the home.

My plan was simple: Get pre-approved and get a private hopefully low interest loan for the down-payment and closing costs.Get the $195,000 property at a lower price point and go through all the red tape since it needs to be fixed and it is a very good price for a two family.

For example: "All payments received shall be first applied to outstanding late fees and charges in any order as determined by landlord prior to the application of such payment to rent." or something like that. 

The lease option isn't for everyone and won't be applicable on every property for every property owner or tenant. 

She is a 50 or so years old who would afford a 100% or the rent , she has indicated in her application that her daughter (30ish) and granddaughter (11) will be living with her, they are under the occupant section of the application.This lady has a clean record, good credit score and stable job with the county public school system. 

It's older, but still applicable https://www.amazon.com/Housewise-Womans-Buying-Renovating-Estate/dp/0060971649/ref=sr_1_1?

Fortunately, I have a wealth account at my bank, told them the story, and they told me to submit the loan application to them, and they'll refi'd me, or give me a new mortgage without all this fuss.

Also, please continue to share your knowledge about how to start the application process to find a tenant after listing a property up for rent.  

The company i worked for has haved many bad experiences cause of bad organization, materials stolen, project managers that didnt even know how to use a tape measure and all this years they supervised my work and I made them famous they became big bosses but honestly I was the one running the show.

This again depends on the city.To bring the unit into compliance down here you would most likely have to combine two of the units as the planning/zoning, bldg department, and maybe fire department (all where applicable, will depend on the city) dictate.