Does this mean they're technically violating lending rules/regulations by not informing the lender that the property will be sourced as a rent-by-the-room asset? 

The majority of states have NOT enacted any rules, regulations or legislation that has altered the “wholesaling” landscape.  

This is particularly beneficial in popular tourist areas where demand for short-term lodging is high.Flexibility: Owners can choose when to rent their property, allowing them to use it personally during off-peak times.Support for Local Tourism: STRs provide a unique lodging option for tourists, helping to boost the local economy by attracting visitors who may prefer a home-like stay over traditional hotels.Diversification for Investors: STRs provide real estate investors with an additional income stream, especially if they own properties in tourist-heavy areas.Cons:Strict Regulations and Higher Fees: San Antonio recently updated its STR regulations.

I was recently looking into wholesaling in PA around the Wilkes-Barre area and was wondering about the overall laws and regulations.

If a wholeseller is really thriving, they need access to OPM. that is why there are thousands of transactional lending groups because the demand is there. and with regulations changing, this will become more relevant. 

Here is the rule from the IRS regarding length of stay for short term rentals:As defined by Treasury Regulation Sec. 1.469-1T(e)(3)(ii)(A)The average period of customer use is 7 days or lessThe average period of customer use is 30 days or less.

Norfolk is pretty loose on regulations, but fewer areas are desirable, and Virginia Beach has very specific locations that can be STR (Sandbridge and The Resort District).

Ensure it cash flows comfortably.Market & Location: Research local rental demand, property values, and any applicable LTR regulations to understand the area’s potential for long-term success.Future Potential: Consider if the property could appreciate or attract quality tenants over time, supporting stable cash flow and asset growth.This checklist should set you up for a solid LTR investment!

However, based on regulations, only Seattle and San Jose allows you to have two separate parcel numbers.

But all of these investments operate under highly regulated and constrained exemptions to securities law, and I have been told it is very difficult to do the above legally.