Quote from @Adam Michael Andrews: The whole point of investing in a note is that in a downside case you have some sort of surviving claim in BK even if it suffers a haircut or is equitized at that point.The fact that you are prematurely converted to equity in a default situation means you have the equity risk via that clause but have a capped upside if things go really well.

I use units from each of those companies, and I've had one premature failure in the last 11 years (n=20 or so). 

However, if the borrower never intended to occupy the home or moves out prematurely without a valid reason, it could be considered a violation of FHA occupancy rules.

I'm leaning towards trying to rent my house out, furnished, at a premium $3,000/mo after I re-build personal savings, but can't afford the risk of a tenant leaving prematurely and having a whole house vacant while also paying rent somewhere else.

Sticking Gum and seeing if it will stick This one is self-explanatory.

You need to do your own gum-shoeing! 

It will feel like there is no real choice but to play the game in a broken process  I don't know which lenders YOU work with that stick chewed bubble gum at a wall, but I know for me, I make sure to see if a deal is worthwhile and is closable.

However, there can always be specific circumstances that might cause an investor to prematurely sell.  

best wishesHey Dan, I'm not sure why we're going back to "Mike's business is built out of Lincoln Logs and chewing gum" again.

Oh, ignore it, were going the bubble-gum and duck-tape route, ok.