Rehab funded with a Loan Tax Question

[A.D. Swan]

Hi All,

I'm starting my 1st Rental Property Rehab, and have seen questions regarding the categorization of the rehab expense (for tax purposed) as to whether it should be treated as Repair/Maintenance vs Capital Expense.  My question is if the money being spent is being reimbursed by the Rehab Funds in the Lender Reserves for the Loan, at the end of it all wouldn't the cost just be treated as a Loan vs either Repair/Maintenance or Capital Expense on the Tax Return?

Thanks for any and all replies in advance.