One reason is restrictions on sex offenders living near schools.

But, given that they are seeking to purchase, it seems like an interesting opportunity.I envision this transaction as a more restricted version of what they are doing in San Francisco: https://www.verbhouse.com/.

@Holly Barrett you should NEVER work with a lender that has any such restriction.  

Local to me in this instance is not restricted only to Pasadena and can include the Houston area. 

Getting a variety of restrictions from 3-months of payments shown, 12-months of payments, full repayment of any missed payments. 

Children that are fostered or adopted are no different than birth children.You could restrict based on occupancy standards, but it doesn't sound like that applies.

They don't allow you to STR for 4 season due to septic tank restrictions?

I feel like Illinois is one of the most restrictive states with laws regarding utilizing that way of renting. 

You may already have a handle on this.Third, you have to be sure there are no deed restrictions or covenants that prevent it.

Check with the city or county planning and zoning department to get an idea if your concept will work, if you can build what you would like to build and what is required for all approvals including site plan, building permits, proffers, water/sewer tap fees, bonding requirements, inspections, setbacks, lot coverages, parking requirements, height restrictions, C/O process and time frame for all approvals.You also need to check with the utility companies and get an idea of availability and cost estimates from them for water, sewer, power, gas, cable, installation and connection requirements, tap fees, hookup charges, transformer location and relocation, power line and power pole relocation issues.