Borrowers are not allowed to complete any of the work themselves as sweat equity.Loan to Value Calculations:The original principal amount of the mortgage may not exceed Fannie Mae’s maximum allowable mortgage amount for a conventional first mortgage.Purchase: For a purchase money transaction, the LTV is determined by dividing the loan amount by the lesser of the “as completed” appraised value of the property or the sum of the purchase price of the property and the total rehabilitation costs.Refinance Transactions: For a refinance transaction, the LTV is determined by dividing the original loan amount by the “as completed” appraised value of the property.Eligible Renovation:There are no required improvements or restrictions on the types of repairs allowed.

After construction is complete I would do a cash out refinance to pay off the heloc and then rent the home with hopes of it cash flowing and appreciating in value.

I could also refinance before 2 years is up but closings costs for apartment buildings are expensive right?   

The BRRRR strategy could be perfect for you—it’s a smart way to buy, rehab, rent, refinance, and repeat, allowing you to grow your capital while accumulating more properties.

I would think that if you have an FHA Loan in place you could easily keep this property and turn it into a STR.Also, you can have up to 10 FHA loans out at 1x before you have to get into DSCR Loans.If I were you, I would go purchase the new property, and then wait 60-90 days, and see what type of Refinance I could get on your 1st property. 

For example if a borrower is using cash from a cash out refinance, the borrower would have to provide the letter of explanation along with the closing statement to show that the cash out refinance happened. 

Awesome thanks had to do extensive research as the banker confused the hell out of me or was just trying to sell me a refinance.

"I'm a RE, finance expert (stocks), etc"

I feel like we are in a bit of a dead zone where its not enough work to justify but too much to handle at certain times especially with refinances coming up all. 

70-80% cashout refinance.