Also consider some mortgage companies are afraid of the liability & require this to be solved prior to closing.  

You'll have about as much security as limited to proper notice for non-renewal that would require a notice period equal to 30 days given prior to the first of the month.

The smaller, regional banks are particularly more forgiving and in analyzing your overall financial outlook and not examining your taxable income so heavily.  

Prior to the buyer's agent taking the time to educate that listing agent (I'll give you one guess as to why), I wonder how many of her listings had buyers that were turned away who had offered a fair price/terms, that the seller liked, but just wanted one little thing changed like a $450 home warranty, and the buyer ran off when they saw the multiple offer counter-offer form and didn't want to play that game...

There are several other standard market companies that should be considered prior to going with a nonstandard option as the coverage will be much broader, and most of the time, much less expensive.

The homeowner would cite various legal issues and would always win their cases against prior contractors in court.

Real Estate - ReciprocalPurpose:This application is for an individual Broker or Salesperson who is actively licensed by examination in a reciprocal state.

@Martin SnellMartin,You will have a hard time getting the FHA loan for another "owner occupied" property because underwriters look at value of current property, whether they determine your living situation will be going backwards (most people like to live in the "big house" rather than smaller rental properties  or single family properties rather than units) and where you work if you're moving further away from work etc...LendingHome is a good option for rehab money as are a few others, but your observation is correct, you'll need to pay the contractors out of pocket prior to each draw. 

The situation is that the home is under a lease for a remaining 6 months (assuming they won't leave earlier with incentives) prior to the time when I would move in.  

PRIOR to the laws being enacted  Nothing happened but they are tough folks.I had to send them copies of every deal I ever did in WA which was Hundreds of files... just the printing was a bunch of money.. then of course they never say anything just leave you twisting in the wind.