@Ryan Lee, errors like this are fairly common.

As for a information to specific grades for neighborhoods, you may struggle to find that as it can be fairly subjective.

This particular tract of land is a fairly rectangular 7 acres (400'x700', more than needed) and is owned by someone who stopped using it prob 10 years ago.

I'm looking for suggestions on how I might fairly structure a deal and still keep the current mortgage I have, at 3%.

If location isn't a big factor (does not seem to be based on original post) I would highly recommend looking into building a barndonium or shouse in an an area where you can get a tract of land fairly inexpensive and has little zoning regs and requirements.

Fair enough.

To be fair, some of those issues may not be covered such as contractor's cheating you and I have never seen a pipe burst cause a total loss.

Asking for a prequalification letter from them seems like an easy and fair exchange.

How do you fair late in the year rehabbing/ flipping houses?

Yes, to be fair, if it's a straight-forward all-cash purchase, then the due-diligence likely could be done in 60 days or so.