I considered rezoning to commercial and selling to a developer, but as I understand it the city is currently very reluctant to approve these kinds of requests and commercial development is very slow because of high interest rates.

Also, the account grows at half of the rate while the money is out.

That is 90% of the deal right there/ Youll have better rates and more opportunities with at least 90 day seasoning.

Or Brokers that just jack up the rate and charge no points and get the rate rebate

Don't expect a high success rate.

The rental comps would bring in $1200 - $1500 profit per month (the fixed interest rate is very low).

There is government data online to see where good schools are, low crime rates, and desirable city amenities.  

You may get higher with DSCR loans but expect upfront points and a higher rate

Would it be better to do a sub-to and take over their existing mortgage and rate OR get a PML?

Hello, this lender at gaurenteed rate says my DTI will be too high AFTER i buy this SFH (with FHA) that i will turn into a rental later.