Your lender doesn't care where you sleep ; ) You are technically supposed to use your home as your primary residence for a defined amount of time according to the terms of your loan.

Is this just to refinance rate/term or are you taking cash out?

In short, he seemd like a "regular Joe" and he had this laid-back style about him and he explained property ownership in simple terms (I was 24 at the time) for me to understand. 

I recall someone talking about sending multiple with different terms.  

To be honest, you could probably fix the violations over time...there aren't any fines for the violations and they usually can allow you a lengthy time to make the repairs.Either way I'd be happy to connect off line of the forums and talk through the violations to see how we might be able to help!

I guess the upside for option B is they they could get a little short term cash but then they resign they will be hit with a larger bill.

For example, living in one, mid term renting one, and short term renting the other?

In terms of a leaseback, this specific seller will be a high risk tenant and might never move. 

We've also privately lent with similar terms for our new installs.

Obviously you should have an agreement to the exact terms of the partnership between the two LLCs.