Does anyone have any idea why this clause is being included and what to look into to avoid any disasters with what I'm assuming could be zoning issues?

FHA 3.5% is very difficult to get accepted contract in this highly competitive Red HOT Real Estate Market across the major metros in the country.I will suggest you get a 5% Conventional Financing.

That you are having to ask about basic lease questions raises some red flags.

Currently have a 3 lot development site available for sale for a bigger developer who could put up a 6 story/70+ unit apt in an opportunity zone.

I’m gonna pull out some Kenny Loggins here and badly sing “Highway to the DANGER ZONE”.

Contact your local government zoning office and they can help you understand what is permitted to be built there and the permits you require.

The zone of the property requires approval of a special use permit to make the change.I've been reading up on the special use permit process in Stonington but the question I have is: Are we allowed to do the process prior to closing (with the seller's agreement, of course)?

This is what is called a red flag. 

Sites like Realtor.com don't show zoning or say whether STR is cool or not, most of the time.

Market wise, I have read that people love the Gatlinburg and Pigeon Forge areas however I have not been able to find anything that is in the right zones that looks like a potential STR winner.