We have been putting most of our extra money into retirement accounts before this.

Any reason to not account for a larger CapEx? 

I would make sure to connect with an investor friendly accountant to understand the tax benefits you may be able to pursue. 

My cash is in a high yeild savings account only making about 4.5%. 

That would put us just above 1.6% of the $1.1M purchase price, so still short of the 2% Rule (and it still doesn’t account for the renovation costs).All of this begs my question: Is the 2% Rule still alive in the central Pennsylvania market in 2024? 

When we did it, new management had old manager transfer all funds held in relation to our account to the new management, including existing security deposits. 

These are not typical life insurance policies.If the down payment comes from an existing asset whether it is money from money market, money from savings account, money from CDs, money from heloc, money from selling stocks, money from stock margin, gift from family, money from life insurance it does not achieve a 100% LTV with respect to determining return.  

Retirement account?

Their rationale is based on Illinois law, where security deposits must be held in a separate account and accrue interest if held over 6 months.

Especially in tax advantaged retirement accounts.