VA (refi to conventional?)

[Chris Lyness]

Long time BP podcast listener, new to forum, apologies in advance for being a newbie and long worded. Any help would be appreciated in advance. 
I purchased my home 3 years ago from Fannie with a VA loan in Worcester, MA. I got what I thought was a good deal. 1530 sq ft 3 bed 1.5 bth with pool. House needs work, started some but still needs some major upgrades Bought for 172000, owe 148000 comps 260-315.

Life changed, 2 babies and a mother have forced us to look for more room.  We planned on continuing renovations and selling in a few years. We found a perfect house in neighboring state.
Recent remodeled 4500sq ft with 1500sq ft in-law which VA won't consider income from because I have never been a landlord. Seller accepted offer but put a 14day under agreement clause for my house to be under contract. My agent thought no problem, Worcester is a hot market and inventory in mid 200 is non existent. However, COVID and holidays are making it look like 14 day under agreement will not be likely. Should I refi out of VA to conventional use hard $$ to remodel? How do I convince VA lender, and seller this makes financial sense and I will figure out financing.