If a Lease Option in Texas is structured the following way will it be legal?  Is this a loophole around the several restrictions in current law? 

Assume the lease option contract is for 24 months, $1K/month rent, and $100K sale price.

1. Tenant-buyer must exercise their option by day 180.

2. If they don't exercise their option, the lease continues as normal until the end of the 24 month term.

3. If they do exercise their option, the lease contract is terminated and a new owner finance contract begins with monthly payments of $1K/month (same as lease agreement) and a balloon payment for the balance is due on the 24th month.  The tenant-buyer would pay off the balloon payment with conventional financing.