The itemized damage estimate that my insurance provided me lists an Actual Cash Value that is 15% higher than my Dwelling A Coverage. 

If is 65% and below LTV you won't need to provide reserves. 1.

I'm considering partnering with a non-profit that would manage the sober-living program; with me just providing the house passively for rent on a per bed basis. 

For me personally, our STR and our little inn provide more than half my family's income so I feel I have a fiduciary duty to my wife and kids to maximize that. 

Then there’s fraud or misrepresentation, where borrowers inflate project values or provide false documentation.

I am a realtor and wholesaler, and I get some buyers looking for owner financing, some sellers need/prefer getting cashed out and there are some lenders I work with who can provide the financing however they run out of funds sometimes.

This includes contacting the applicant’s employer and speaking with their supervisor to confirm job stability, income, and reliability​. if the person has not been employed at their place of employment they would require a guarantorCredit Score and Debts: Applicants need a minimum credit score of 620, and while we review debts, medical debts are generally not disqualifying unless they impact overall financial health.Criminal History: We do review criminal history to ensure safety and security for our tenants, while remaining mindful of state and federal guidelines.Rental History: Positive references from past landlords, with no evictions or significant lease violations in the past five years, are essential. and we can see into the court system if they have an eviction judgement.Release of Information: We include a release form allowing us to verify employment and rental history directly, which helps us get a clearer picture of an applicant’s background.This process has worked well so far, but I’m always open to improving.

Additionally, listing brokers represent what seller's provide them. 

Hoping that someone could provide some guidance on this so I can decide how to proceed?

The restrictions vary by location, but they can impact guest satisfaction and demand.