I personally believe the positives of FHA financing far outweigh the perceived liability exposure many caution of and its one of the few circumstances where I wholeheartedly believe investors should prioritize FHA financing over purchasing properties in an LLC. 

In some circumstances the NTQ goes from 5 days to 30 days (things like lapse of time evictions).

@Chris Ray, in your circumstances, I'm not convinced that a HELOC would allow you to "pay off big chunks" quickly. 

I am considering hosting the rental myself and living next door.Could anyone provide guidance on how to proceed under these circumstances?

Everyone has a unique combination of skills and circumstances. 

I've had very similar types of projects that took vastly different effort due to neighborhood opposition, or unforeseen City requests. 

I will under no circumstances take responsibility for the safety of a tradesmen if there are pets on the property.2.

.); the larger drawbacks of course are lost investment gains in the plan and potentially needing to repay the loan balance in full if circumstances change, among others.

This is alarming; it's the first time I've heard of it.Under what circumstances would anyone be required to pay more than 1-2%?

The builder's PSA is going to have clauses protecting them in the event of unforeseen delays, but if the delays are bad enough, they might be willing to compensate a buyer on a case-by-case basis.