In order to incentivizes applicants, I did a two year lease option.

Technically you could buy the house by signing the deal on a napkin, though I don’t believe anyone will advocate that. https://www.trec.texas.gov/taxonomy/pdf-category/contracts-forms-applications

Will this scare off applicants? 

I would just contact the lease holder and ask them to have her fill out an application and put her on the lease.  

To get a short term rental permit in the city of Portland you must live in the address of the STR 9 months out of the year and prove this by providing a copy of your driver's license with that address on it...unless y...

Believe me, I already have the loan application process underway, but i am doing some due diligence to make sure I have back up options in case it doesn't pan out quick enough. 

I do seem to have a LOT more denied applications and it takes about two weeks longer to fill a unit.  

I found it a bit boring, but it gave me the requirements to be able to submit my application.

You may consider capitalizing some of your expenses while you are working to complete everything required.If so:You will want to capitalize these costs until the time as you start to bring in income, then you may deduct your startup costs to the applicable threshold and then you will capitalize anything above that point.

FHA's website states: "Minimum credit score requirements for FHA home loans depend on which FHA loan product the applicant needs.