My original reply specifically stated that the investor had an obligation to be polite and not argue or otherwise force the issue if the tenant was reluctant to cooperate. 

So with this option you are paying $2,750 none of which contributes even a penny to your equity in the home.With option 2, you pay 3.5% or $3500 but every single penny of that counts towards your equity in the home.If you look at it this way, you are out of pocket an additional $750 by choosing option 2 instead of option 1 but now have $3500 of equity in your home instead of $0.The tricky part is that option 2 forces you to pay PMI which you do not have to pay with option 1.  

I know if I force her to move, this will cost time and money to replace her.

I would have to start raising the rent right out the gate and this would most likely force them to move and then I really would have concrete in my toilets. lol

If you're willing to live like no-one else and sacrifice with an end goal in life (not just money, but people-time-service-things of value beyond money) you'll create a life for your family that will be a force for good and happiness.  

I think you will find that if your bank is placing the mortgage in the traditional markets, you will be forced to conform with Fannie Mae/Freddie Mac guidelines.  

All of my no/little money out of my pocket deals have ended up that way in the end, but not at time of purchase.Bought a few steeply discounted off-market properties, forced appreciation through fix-ups/rehab, then refinanced.  

Depending on how much rent your tenants are paying if you are forced to sell during their lease your property is likely not worth what you paid for it.

Instead of punishing Wall Street, the burden of compliance forced all the smaller firms out of business which benefited the big players who'd supposedly been so reckless a few years before.As far as its effect on business and investment, just look at the sluggish "recovery" of the last 8 years for evidence of an economy shackled by over-regulation and bureaucracy.  

My market here doesn't have a lot of good properties that allow for pets, and most pet owners are forced to move to the older part of town.