I thought about that, but ultimately I don’t want to have to pay the money back. 

We still don't know what's happening behind the walls.I know we made all of the rookie mistakes on this one and now have to pay the ultimate price.

Ultimately I'll be a pilot in the National Guard, so we'll be back up in Massachusetts.We want to keep our current home, at least for the immediate future.

I ultimately interpreted this as though Airbnbs were being frowned-upon by local government.

A good start is to download "The Ultimate Beginner's Guide" and read it over.

I love your passion to ultimately invest in group homes.

I am not a guru on that matter but the value of the Project would ultimately be based on what are the realistic projected revenues. 

I have a few goals.1- acquire property to ultimately build a portfolio (I would gladly flip or make it a rental)2- generate some strong interest from the liens

The bank is not too cooperative in this and ultimately may not provide that letter.  

Unless you're planning on significant appreciation or rent increases this is likely a loser, although ultimately I would decide based on the potential internal rate of return for the duration of the investment, to see whether you can invest that money for a better return elsewhere.