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@Andrew Postell @Jorge Ruiz, 1) what would prevent someone from acquiring, say, 10 houses in a single year by recycling the same initial all-cash-purchase money 10 times with this strategy of having your own LLC provide your mortgage and getting that existing mortgage refinanced by a bank within days or weeks of purchasing?

Unless there's an actual provision in your specific loan agreement that prevents you from renting it out for 1 year, it's not an actual requirement, just "gouge," to use the military jargon, that people like to throw around as a rule of thumb.The point of the VA Loan is to provide service members and veterans the opportunity to purchase a primary residence. 

Put your approval standards on your application, which may prevent some from even turning it in.You only need one qualified applicant.

In order to prevent you contractor from having to front your project cost, we like to use phone orders or we put the list together the week prior to tell you exactly what we plan to buy so you can deposit just that amount.

Most prevent people from running commercial businesses out of the property.There are many issues with this outslde of the condition of the property. 

It also prevents them from having to pay back all the depreciation (depreciation recapture) that they enjoyed during the lifetime of the investment too.  

I know neighborhoods preemptively zone overlays with old multi's over to single family to prevent higher density housing. 

If the state deems the work to be unauthorized deleading, it can prevent the property from ever being able to get a letter of compliance. 

It sounds like the PM was trying to do a quick, lower cost job to save money, and while it didn't meet your expectation, I feel it could have been prevented with better communication.