Even if your current appraised value is $200,000.00 most conventional and government loan programs will allow an LTV of 80-85% as a owner occupied cash out and between 75-80% cash out as a non-owner occupied loan.

I hope to transition to other financing options once theres credibility.

Currently leasing to a family and am in negative cash flow though I expect the area to hold strong through the next downturn if not appreciate significantly due to large influx of government jobs into the area (most of which are 6-figure salaries).

If it is that old, probably all the people that worked the case are gone, the current government workers have given up hope of collecting and the case has long been forgotten.   

You will have a lot more credibility talking to investors and attorneys with a deal in your hand. 

@Cole Black  If you plan on living in it, you can also look at the new government program where they will lend you money for the house. 

If you plan to carry the paper, there are regulations that govern that as well.  

Let them know your deal criteria and let them know about your verbal commitment amount so that they know you are credible, serious, and have the ability to close on a deal.

This is why the safest investments such as government bonds offer very little rewards, and the more and more risky the product, the higher your theoretical rewards. 

AFAIK, you do NOT need to do anything other than prove, if the government looks into the details of why you moved, that the reason you're moving is because you "upgraded" in some way on the new property (more square footage, additional bedrooms, better school system/neighborhood, etc.)