203k or conventional using HELOC on other home?

[Dana Graepel]

I own a home outright and am in the process of buying another using a loan. Was going to do an FHA (thus living in the property with the loan), but the bank will not do it because the roof needs to be replaced. I'll either have to do a 203k loan (lots more appraisals and inspections to pay for) or a conventional (taking some money out of the paid off home for closing and repairs). Which should I choose? If I go with conventional, is it better to live in the paid off house or the house with the loan?