Sounds like they got a traditional modification where the arrears were capitalized into the loan.

Hello BP!! I hope all is well. I am in the process of prepping my home to do a lease to own. I owe $159k on the property and I pay 1,111/month for a 4/2. I planned on renting it out for $1350 (Very reasonable in my ma...

Hoping the next offer I submit is a more traditional offer-counteroffer situation!

@Nancy Dominick good luck in following in this 'family tradition' :)Make your grandfather proud!

I have not, but many localities have programs for residents if your income is low enough, typically I would expect that this would only apply to a primary residence. 

We are purchasing a home that we intend to live in as our primary residence (we have two other investment homes out of state so it's not our first rodeo).

Your best bet may be to find a local credit union as they tend to have more flexible terms and higher LTV's than traditional big box banks.

I have a three options to finance this deal from my perspectiveOption 1 - Take the principal/profit from the flips that is coming back to me and use that as a down payment (which will cover enough to avoid the PMI) for a traditional fixed rate loan. 

I realize it would be cheaper to just get a traditional 30yr loan personally, but i like the idea of protection that the LLC offers.  

But as yet, I have not found any traditional or non traditional lenders that will do so.