If you have an existing loan, there may be prepayment penalties, or some other restriction,  that you need to be aware of. 

As far as the legalities--Round Rock does not currently have an ordinance against STRs like Austin does, however many of the HOA's do have restrictions.

Here is the link for Freddie income limit look up, if the property Is located in a low census area, then there is no income restriction http://www.freddiemac.com/homepossible/eligibility.html

But if you consider the area restrictions and the needed sophistication of the investor it may be considered less ideal for some.

To answer your question about the area or type of property, yes, you can make the agreement more restrictive that way, and it is obviously better to talk this through with the agent before you sign the agreement.

However, if you're not in an HOA (or in an HOA that doesn't restrict STR's - seems hard to find!)

Network with your local investor community and look for an opportunity to invest in a joint venture which would mean fewer restrictions than investing as a Limited Partner. 

If there is no provision or restriction then it’s up to you.  

Account ClosedThis topic gets discussed quite a bit and you often find people split on whether or not you should take distributions from restrictive retirement accounts.

Again, there may be association restrictions (if this is a condo or subdivision) and city requirements to be resolved.