I had few options so our cost doubled.  

We also had the option of another type of policy that was even less expensive that would have required us to spend at least 1 night in the house and rent it at least 30 nights each year.

@Tim Holt, Yes INDEED house hacking is the best option for most 1st time buyers.  

Focus on strategies that align with your needs, like turnkey properties, build-to-rent options, or small multifamily buildings, especially if you prefer less hands-on management.

There are a lot of investment options.  

Now, getting around the Due on Sale might be as easy as doing a Contract for Deed or a Purchase Option instead of Sub-to.

With some of the new properties they find they are getting great interest rate buydowns from builders. with equity of 1.2M you have many options on where to move. 

Is the option government supplied insurance where taxes supplement the insurance?  

Best to talk to her and understand your options.

I've reached out to the gentleman that owns the large PM group in the area to see if he knows of any smaller PM that I can connect with and I also messaged my credit union to find out what my best options would be.