Please advise on the best option(s) for our family, as well as if I am missing any key info needed to make this decision.

After my daughter was born and making the decision for my wife to stay home full time I knew I was ready to get started!

Understandable that you're feeling about a bit unethical about the decision one way or another. 

If I were to house-hack and purchase a multifamily home and stay in one of the units, is it a wise decision to use a FHA loan to purchase the property?

In my state the reason deposits are held in escrow accounts is so a neutral third party has the money in the event of a conflict like you are describing.Your first mistake was to get into a hurry: I could be completely wrong but it sounds like you made a hasty decision based on emotion and not on what may have been best for your situation.

That way, you can make the best decision for your specific property.

That is incorrect; the only reason you cant get a conventional loan is if your self emplyment is so new that you don't have 2 years of tax returns.

He's been willing to help a rookie investor like myself, answering questions, and advocating for me to make safe decisions.

Best of luck on your decision and Welcome to Texas!

Well, should one of the non-vaccinated wise-ones decide to come down with COVID (decide is the correct word, since the decision to not contract it, via the vaccine, was also made), how will they pay their rent?