However, most-likely you will have to get a variance and have to comply to all current building codes, including egress in the basement and sprinkler system for the whole property. 

There are some things you need to be aware of to comply with the SAFE Act. 

If I intend to meet and comply with the normal legal requirements for primary residence, will the fact that my wife doesn't share the primary residence matter to a lender?

Notice of the limitation on liabilities of a series required by Section 101.602 that is contained in a certificate of formation filed with the secretary of state satisfies the requirements of Section 101.602(b)(3)...So after doing some additional research, I complied the following notice and included in my LLC certificate of formation application. 

The challenge is presenting this in a way that complies. 

Many think that with a few years experience buying houses, and spending $15k on attorney fees to comply with a Reg D filing, all they have to do is put their offering on line and money will be pouring in.

I would definitely NOT comply with that request.

Assuming it complies with building codes, zoning and passes HUD inspection.

If this is a deal breaker then you will likely lose your deposit.As long as the neighboring house and structures complies with city ordinances and HOA rules/regulations, I don't believe there is anything you can do about it.  

Just ensure you or your property manager are complying with building standards and have a liability policy of at least $300k and you're in pretty good shape liability wise.