And STRs really help because you don't have the large dings that long term rentals have - i.e tenants damaging the property to where you have huge make ready costs (the str insurance covers that), no collections or evictions issues. 

You’ll want to make sure the rental income comfortably covers the new mortgage, taxes, insurance, and any maintenance costs.

And a large decision point for them to rezone it to allow 1-4 family was contingent on me living there (which should not be relevant to a project improving the community).

If I keep the house in my name and use it as a rental, would I need to do anything other than notify the lender and adjust my homeowners insurance to reflect the house is a rental? 

Your insurance is going to be highly variable and I wouldn't use what an agent or the seller tells you as the cost of dwelling policies have increased substantially over the past few years due to rising new construction costs. 

If you are struggling to make the numbers work, then it is likely not a deal to pursue.Our biggest challenge in the New Orleans area is the cost of insurance.

And then get to a decision quickly.

There is a company in my area that it looks like it will cost me about $400 a year per property but after this week I would welcome that "insurance" as I just had a large unexpected AC bill.  

You rate at 3.62% is pretty good but its on an FHA so you also have to consider the mortgage insurance if this is going to be your forever home.

Consequently many inexperienced investors make investment decisions based on where they can afford to buy, not necessarily where a good investment thesis may exist.