Ok so buy and hold the home is my best option then.

A few things to keep in mind when obtaining an FHA 203(k) loan:1) Improvements paid for with a 203(k) loan must generally be completed by a licensed contractor and are subject to approval by an FHA appraiser as well as oversight by the FHA-approved consultant if it’s the standard loan option.2) You must develop a remodeling plan, schedule, timeline and put it in phases. 

For example, Clarksville, TN (outside of Fort Campbell military base) could be a great option.

Our only other option was to reject her as a tenant. 

ThxI think your best course of action, if the property is really worth it, is talk to a good real estate attorney and get your options and probability of being successful. 

Private lenders offer flexibility in structuring the loan, with common options being interest-only payments with a balloon payment or a fully amortized loan.

I am requesting seller financing and would like to see what options I could get if it’s even worth it. 

What are your other options for liquidity ?  

In light of these circumstances, I'm seeking advice on the best financing options to address this costly project if insurance coverage falls short.

@Jacob StraussenTerm is essentially a commodity biggest difference you will see is if you want to have options to convert to perm that's when you would want to do more research and really get carrier specific.