assuming this is true, is this typically a requirement of commercial lenders to have that guarantee or is the house as collateral enough?

Rates will vary between lenders as will other stipulations like credit score requirements, collateral, down payment and prepayment penalties.

The property has the separate zoning because the owner was wanting to conduct outdoor events and the City wanted to place a greenway easement on the property, thus they agreed to rezone that piece.It seems to me since the improvement piece of the property, the main collateral, the house is zoned residential then the appraiser and lender would deem the purchase as residential.I'm not sure if convincing can be made otherwise or if a different appraiser/lender could come to a different conclusion.This property would not meet commercial lending requirements.

I would also put in your contract that you have the option of cross collateralizing to another property if you wanted to pay them off early but for tax reasons they don't want their money early.

Have any of you had success in cross-collateralizing your properties to secure a higher HELOC or Home Equity Loan ?

Making loans is an extension of credit, not a method to buy collateral. 

By structuring as a 1st lien purchase-money-mortgage, if anything goes wrong, the F/F has superior claims to the collateral. 

That is mostly because there are so many other people that are basically innocent and have to deal with the collateral damage.

I've never seen or heard of a lender being held to a commitment on a residential property where they didn't have an exit, that being one taking only the subject property as collateral.

When things are competitive (not the case right now) we look at the house, call the lender (commercial), ask if he'll cover the price (cross collateralize the down of 20%).Sometimes he rides by the property but usually says yes or no on the phone.