Trustor will not permit any change in any license, restrictive covenant or easement without Lender's prior written consent.Now the practical answer is no one is coming to check on the property most likely, and unless you default no one will likely care.

However, I’ve read that some banks may not permit this arrangement.

What are the annual filing and permitting requirements?

Is your property permitted for Hostel use?

Your biggest expense will be permits and new panels. 

I did all the labor my self aside from hiring certified electrician and plumber as per country permit regulations.I live in Alaska with my family and work in construction in general (journeyman carpenter turned commercial superintendent turned GC and now rolling steady as one man 'handyman' doing lots of finish work the last couple years).

Do IRA laws still permit this typed of rollover?

I bring a list of the offers (if you have multiple offers), this gives you the base to tell the appraiser if it does not sell to this buyer other people think/want the house at this price too.Also, bring permits for anything that has been done.

I have never pulled a permit for a water heater swap, know no one that has ever pulled a permit for a water heater swap, ever seen or heard about one getting red tagged for no permit, and have never had a plumber recommend getting a permit.

The ability to settle with permits in hand reduces risk and is a far more efficient process.