There were a ton of new regulations in the name of "consumer protection" that exacerbated the lending issues, and made it take much longer than it should have.Lenders may not be as aggressive as they were a few months ago, but if you have a good project and a decent borrower, you can still get your deals done today. 

Is each development project covered under a separate LLC or Trust to protect the company?

I am planning on purchasing a rental property with a HELOC on the home I live in.I am wanting to make an LLC for the property to protect my personal assets.If I use the funds from a HELOC, to purchase the property that will be in the LLC, will my personal assets be safe?

Seattle Metro has a unique protective bubble around it, not to be confused with a real estate bubble.

I understand the reason for the document is to protect the property values of the neighborhood. 

The bigger issue you may face is FHA underwriting requirements are very strict on what they call Property Condition Requirements, aimed at protecting the health and safety of the home purchaser/borrower. 

I have been browsing post on the Coronavirus and I frequently see comments and posts claiming the government is not protecting landlords and only seek to guard the rights of tenants.

They are protected under RSO.   

How do I protect myself legally from them selling the property within that time frame and protect myself from appreciation in the future if the home gets valued higher than what I am comfortable of paying?

Most REO deals prefer cash or private or hard money.So, many new investors think foreclosures are good because they are priced lower, but they are disastrous options for first-time investors as the inspection ability and repairs requests are limited to none and foreclosures also often times come with tax liens and other liens that may all not be fully disclosed at the time of the auction.If you are a first-time buyer and want distressed, you can look at HomePath properties which are Fannie Mae REO and they can provide a bit more protection to you as a buyer.