The problem I have with this is the term "refinance". I think it's very misleading.

What you really mean is that the buyers lease the home for 18 months and then go get a new loan an payoff the old one. They are not refinancing the original mortgage because they are not on it.... or am I mistaken ?

All my lease purchase guys get a new loan and pay off the one I have on the property.

Since they're been living in the house for 12 to 18 months and have a solid payment track record of timely payments (I verify that) it tends to make lenders look favorably toward granting them a loan to buy it with.

Jim' right. Many mortgage companies will allow a lease/option contract that's at least 12-months old with all on-time rent payments to be considered a refinance for the purposes of qualifying and underwriting. The thinking is that they've been making the payments for a year or more anyway, and that they have an emotional interest in the home.

So it's not really a refi, but the lender treats it favorably as one.