Meeting a 20% down payment to avoid PMI seems manageable, although would take a big chunk of my liquid net worth, and I prefer this route over using an FHA loan.

My inclination is to suggest paying back the PML 70% of the land proceeds (presumably $168K) at that closing and then hold the remaining loan until I sell the house. 

Refinance into a debt service loan.

We process, underwrite, close and fund the loan.  

I plan to offer owner financing to others that can't get a loan.

You can get a normal owner occupied home loan to do this. 

Quote from @Jaycee Greene: Assuming you pay asking price, I'd estimate the down payment for something like that using a hard money loan (HML) would be around 40% of the purchase price and your monthly payment would be $2,600 with an interest rate in the low 7% range (probably need a 700+ credit score to get that).

They finally get back to me after the close date to say they need more time because they are try to cross collateralize their other properties to make this deal happen and the bank they were using doesn't do this kind of loan. 

@David Matarazzo  Did either of you move forward with them for property loans?

I am pursuing Fannie Mae’s 5% Down Multifamily Loan.