These smaller banks that have commercial departments want to lend on properties in their area. 

Couldn't the planning department of the jurisdiction tell you what you need to in regards to the environmental?

Check your local building permit department.  

Don't look now but another seismic shift is coming to a real estate market near you.As you might have heard, there have been several recent class action law suits and even Department of Justice guidance that could change the US Real Estate market as we know it. 

As to the issue of captive insurance subs, I worked in the accounting department of a small insurance carrier, set up primarily as a tax shelter.

However, recent developments have raised concerns within the organization.Notably, some of their staff members have departed due to issues related to the work environment and behind-the-scenes ethics.

I am at the mercy of this department and just want to move forward but seem to be going backward. 

The main caveat with that is you may be limited on how much rental income you can use from your departing primary residence (the house you are buying now) when you go to buy the next one, unless it is at least 100 miles away. 

If it's DTI and they are giving you a hassle on using rental income from the departing residence - you can usually work around this by ordering an appraisal on that property or showing a lease agreement dated after your departure.

@Jonathan Klemm thanks for the mention@Jane Mun this is definitely a unique type of case in terms of compliance with the Building and Zoning Departments.