I would apply the cash flow to pay down the debt and hope to have significant passive income (or equity to put into something else) in 10 years.

Are they MF, Mobile homes, the debt fund?

The $380K insurance payout is typically not taxable if used to restore the property.

Debt Protection: If you have mortgages or private loans, a life insurance policy can protect your family or business partners by covering outstanding debts in the event of an unexpected passing.4.

I mean myself and any bank would need more details, but if you utilize that large sum as a downpayment and have a small mortgage, wouldn't you easily qualify for the debt to income?

Using mortgage debt at 6-7% on a refinance to pay off higher rate debt such as a credit card at 15-25% is a savings!

Debt to Income Ratio will be used for more conventional types of financing (Fannie/Freddie).

What are your buyers doing for debt if you're assuming a 7 cap?

If you don't have the extra cash, can you get creative with a private lender or partner stacked on bank debt? 

There is extensive damage to the house and I am working with my insurance company and have talked to couple of fire restoration companies.