Questions about 203(k)

[Jaron Klopstein]

Hey BP Community: 

I am looking to begin my real estate investing journey through house hacking utilizing an FHA 203(k) loan. I have two questions about this:

1. 1. I am aware that the FHA 203(k) loan will require me to live in the property for 12 months, which is no problem. However, I see many investors discussing the strategy of purchasing with a 203(k) only to refinance as quickly as possible into a traditional mortgage. If someone were to use this strategy, would they still be required to live in the property for 12 months after securing the traditional mortgage? If not, what is to stop someone from purchasing on a 203(k), refinancing into a traditional, using their new positive equity to secure a HELOC, rinse and repeat without ever living in the property?
2. 2. Does utilizing a 203(k) and building the renovation costs into the loan limit the potential upside equity with the ARV in any way as opposed to funding the renovation with cash or another method?

Thanks so much!