You can get insurance to cover volcano damage, just like you can get earthquake insurance in CA. 

Please see the following for more on this and here is the particular section that covers the mandatory 20% federal tax.https://www.irs.gov/retirement-plans/plan-particip...

This means that you would likely only be able to use 1 unit's rent as you will occupy the other, which means you might not have enough income to cover the mortgage requirements.  

Buyers are not very willing to cover the commission because they are use to no charge for the realtors services.

Habitat would do it but that's a charity program as you know.My only suggestion to anyone engaged with new construction with Morris is to be uber careful.Home inspections at each phase is critical.. once you cover the walls you cant see the corners that are cut.. even though it could pass city inspection.. also you run into mechanics leins and so on and so forth.. building from ground up takes a little more experience than rehabbing.. 

I have many of the bases covered for my team but the missing piece is a partner or lender. 

Am I covered?

Even then, I have enough of a reserve that I don't need the rent to cover the mortgage.

Either your friend is hiking your rate to cover his compensation, or he put you on a lender paid mortgage insurance program to limit your monthly payment, but at the expense of up front closing costs.

Charge the tenant a "water transfer fee" up front that covers the fee.