The cap rates appear attractive at first glance, though a thorough analysis of the local markets is essential, especially the long-term vacancy rates.

What is the rate of return (cash on cash) if you complete the rehab and rent it?  

And by you posting in this forum that you are looking for ways around the requirement or to prove the requirement just gives them reason to not believe you.Either do the house hack and live in it as your primary residence, or treat it as an investment and get the appropriate funding for that.

And the positive reports, ratings and accolades keep rolling in, i.e.: best places to retire, best places for families, etc. 

I would start there to make sure you can STR the place.It doesn't make any sense to rent a single room at a single room rate when there is a whole, empty house involved.

Their success rate is over  90% I believe.

My bigger concern is not having enough funds for any repairs that may be needed.

Also, what are you main reasons for looking to STF in Rockford, not knocking the area by any means but there is so much opportunity within the city limits where you're less likely to have extended vacancies.Short term rentals have taken a beating this year, while long term rentals have seen an uptick in what they can charge due to high home prices, and inflated interest rates.

A large part of this was necessity; interest rates of 12% - 18% IF available doesn’t leave much room for profit UNLESS property can be transacted with leverage at a lower rate.

I don’t have funds to fix what might be missed by a bunch of stuff obstructing the inspector This propert has been on the market for a month with no offers.