@Karen WanamartaThe zoning is R2, which includes a wide variety of options that includes multifamily, which is defined in the general plan below in this excerpt. 

Here are some general guidelines: Lien Position1st Position LienEquityMinimum Down Payment of 20-25% (a 30% equity to sale price is preferred)Down Payment made in certified funds and not borrowedMaximum Funding of 70% ITV (Investment to Value)SeasoningMinimum of two monthly payments already made12 months or more preferredPayer CreditCredit Score of 650 or higherNo major derogatory trade lines (No 90-180+ days delinquent, foreclosure, repossession, bankruptcy, etc.)No decline in credit since purchase of businessTermsPrefer 60 months or lessMaximum of 72 monthsNo Balloon Payment preferredCash FlowBusiness has positive cash flow1.25 debt service coverage ratio preferred.DocumentationPersonal guarantee from a creditworthy individualStandard documents including Note, Security Agreement, and UCC-1 filing.Tax Returns on the business that substantiate profit and loss statements.OtherPayment history current and verifiablePayer Interview indicating buyer is satisfied with business and comfortable making paymentsMotivation for selling the note is not a result of a deteriorating businessConsideration of high risk businesses or geographic areasIn these situations, sometimes a partial is a better option. 

What I don't like is seeing the removal of peoples options and freedoms to self select and engage in what they want to do. 

My budget will be around $200k but I’m meeting with a lender on Tuesday to go over all of my options.

A good lender should be able to piece together a strategy with you, whether that's cross collateralizing or not, underwrite each option with conservative numbers. 

Quote from @Jimmy Chao: I am weighing some options to help my younger brother buying his first primary with a fixer.

(This option would would not carry any debt, all debt would be paid in cash)Or keep our current house, rent it out, and cash flow NET monthly about $1,500?

No syndication experience but there are about a dozen quality RV/Mobile home parks on market in Oregon, several with owner carry options that can be passiv-ish with management in place.

I figure if the equity we have cash flows better than similar equity in a single family residence in Utah would, then we should consider this AITD as a serious option.

I would go with option A.