#3 - Should I speak to a city planner to make sure I know what the restrictions are before I purchase the land?  

Restrictions on number of renters from the insurance company?

If your buyer doesn't qualify for a mortgage, they won't buy and you'll be stuck with an (fill in here the number of months) option agreement that will restrict you from selling the house to someone else.What are they doing to get  qualified?  

But, I think they are talking about a Fannie/Freddy restriction which comes into play as they use banks that sell their loans in the secondary market..

If you don't have a big (multi-thousand $ per month) budget, your plan will be restricted to free and inexpensive means.  

Distribute Under-Contract Showing Restrictions 65.

Here are the Fannie Mae rules:https://www.fanniemae.com/content/guide/selling/b2...Lenders sometimes apply a tighter set of rules and restrictions, so ask around at several lenders. 

Does anyone know if there are any restrictions on this?

Point being, there are all sorts of different local requirements that may be more or less restrictive than the HUD guidelines.Personally, I'd consider putting an anonymous bug in the ear of the local housing authority . . . that 's just blatantly wrong.

@Sam Leon Be careful about your initial percentages of ownership because the example stated above would restrict you from making any subsequent investments into the LLC.