I want to deposit the tenants' security deposit in an interest esrming account.

Send him a certified letter with the exact part of California code that sites security deposits must be returned with in 21 days.

I work in the securities industry and would almost never recommend borrowing against securities.

My key areas of rejections are: any past eviction in last 7 years, past due car payments, judgements/bankruptcies , utilities in collections, address/social security mismatches(I've caught a lot of scammers this way), fake landlord references(usually caught through simple county searches).

GNMA's role, is that they guarantee payments to the investor of the loan (Mortgage-Backed Security). 

But basically he wanted to rent my property and then offer it as STR to whoever.I said I didn't want it to be trashed (again) and he talked endlessly about how he puts up cameras, other security, knows exactly who is going in & out, cleaners are the finest, etc.

This issue thought me big two things, one never inherit tenants and two even if you do not have the social security of the tenants you can report delinquent to the credit business bureau, I use Sperlonga Data & Analytics if you are interested.

It’s a diamond in the rough when you can find a solid tenant for 6 years. 100% occupancy for 6 years is worth its weight in gold.

You may need some on site security to enforce the no squatters too!

In general with house-hacking I'll always prefer small multi-families because it bakes diversification and efficiency into the purchase, giving you slightly more levers to pull and security in the investment.