HO3 w/ Rental Endorsement vs. DP3

[Policy Monkey]

Perhaps the Lender is concerned because they think that the HO3 means that the client is telling the insurer that they will reside in this second house full time, when the loan is not funded as such.

That's similar to what I was thinking. It sounds like the client is telling the lender that it will be rented, but telling the agent that it won't be.

The OP/Agent could write an Owner Occupied DP3 or DP1 (common in FL, not sure about HI), but it would still be owner occupied, so it still may not satisfy the lender.