You might consider cutting your losses and selling it, or investigate STR options.

However at any given time liquidating these RE assets if your moving to cash is going to cost you 8 to 20%..  8% sales costs if nothing needs to be done and values are exactly what you state.. 20% or more discount if you have to rehab or market price softens at the time you have to sell.. 

Due to the current market conditions pricing the home in the mid 300's we will soon be selling it to the current tenant to increase our portfolio diversification to a more profitable area.

Then you can sell tax free, even better than deductions. 

Also when you do decide to sell your section 8 portfolio, your end buyer will be relieved to see that all the rents are in place and backed up.This is just the tip of the iceberg.

Is there a specific reason preventing the owner from selling to you outright?

But they sell!!!

I'm desperately searching for a financing option for my spec homes that will give me better terms than the 10-12% interest plus $10k closing costs that my current HML is giving me.I tried doing buyer-financed, but they haven't been selling very well (although I really haven't waited long, I'm just impatient).

I ask because when it comes time to sell, I like having the option to sell to both investors and the retail market.

So really take a look at who you're selling to.