When you run property management numbers - they get 'ugly' real fast.Lets say you buy a long term rental and it rents for $1,200/month, and if you financed it, it costs you $900/month for a fully loaded (Principle, interest, taxes, insurance) mortgage.  

Our mortgage was significantly higher than our flood insurance, and I don't know if we qualify to try to apply for FEMA or if there is other assistance, and if so, if we would apply as a business (we file it on our personal taxes as rental income).

Then after settled move into other projects each year to pay down debt.also, from FHA one to two on our duplex we would need to refinance out of that loan, correct?

We would pay for the screening. 

A lender with a real estate license can NOT pay you a referral fee for sending him a loan. 

You don't pay for anything either!

I get builders risk policies for all my new builds and at least in the markets I built in Charleston SC  and Portland Oregon have never seen the fence and security and like you I would have trusted my broker to mention something like that.. fence and 24 hour security is just not something you do on ONE SFR rehab.. unless its a known high crime area like South side of chicago and now inner city Portland you really need the fencing etc other wise the homeless and druggies will walk off with everything.. when did a bunch of rehab loans in South Jackson MS same thing theft was off the charts and we had houses burn down .. but the dollars were much smaller.I know I have gotten larger policies for my bigger developments and I did pay my lawyer to go through them line by line and at the end of the day they really cant say what is or is not covered.Also you simply would not think of anything in Colusa county as being high crime .

My mortgage is currently $2500, not sure the payment will drop within those numbers even if my spouse being a Active duty.Does getting my loan current mean I have to pay the entire amount owed.

Mortgage with taxes and insurance would be around $1350/month.

And unlike HOAs most are not going to flat out ban STRs, but rather try to collect taxes/fees from those that want to run them.