HELOC VS CONVENTIONAL

[Huso Akaratovic]

Greetings,

I am stuck and would appreciate some advice on which avenue to take regarding the financing on my next primary residence. I currently own a house that I purchased in October of 2015. It was a HUD home and my intent was to rehab it, live there, and sell it 2 years later and escape the capital gains. I currently still live in that same house, but I found another HUD home that I am interested in. I am considering this home as my next primary for the next 2-5 years. The new house is in a very good neighborhood, and I need to act fast while its still under the owner-occupied stage. The home needs work, but it's in decent enough condition that it can possibly pass for a conventional loan with certain restrictions. The HUD placed a following disclosure. "Insurable With Repair Escrow: A property that requires no more than $10,000 for repairs to meet FHA's MPR and MPS. REPLACE MISSING FLOOR COVERING”

The floor is missing throughout the entire house, so how does this normally work when obtaining a loan, if someone can please break it down for me. I was considering getting a conventional loan with 5% down. What other options do I have? I have other assets. Would it be smart to do a HELOC on some of my rental properties, and just pay for the house that way, fix it up and then refinance it on a 15 or 30-year conventional loan? Any help is much appreciated.