they stated it is off the total2) Is my closing costs based off of the purchase price or the purchase plus rehab and they stated total.3) The LO I spoke with stated finding my own contractors would be recommended4) I asked if there were restrictions on how much $$ could be allocated for rehab, he didn't have a firm answer but implied as long as the appraisal supported the work that I would be okay.5) When I asked if I could also use the down payment assistance of $5000, they stated no.6) As I would be looking at a gut rehab project so that I can find something within my price range and asked him how the 6months of mortgage payment deferral would work (HUD allows you to defer 6 months of mortgage payments into escrow in case you are not able to complete rehab and need to rent) he stated he was unsure but I would need to make all payments and they don't defer.7) I have a line of credit with a credit union, as I know from my mortgage experience they are going to underwrite me as if the entire LOC is drawn I asked him if I can just apply that to the down payment and closing costs and again didn't get the best answer.in my experience i would typically just go to a different lender but unfortunately with 203k loans, even a bank as big as bells bargo their regular LO's defer you to a FHA 203k specialist and i contacted two different LO's one near Rockford and one downtown and ended up getting the same guy for FHA 203k.Any insight or advice would be sincerely appreciated! 

Generally speaking expenses are allocated in proportion to the time rented.

For example, if a new roof costs $5000, and the current roof is in good shape and has 10 years of remaining life; then what is monthly cost that should be allocated toward roofing.

As far as funding, our local HUD is hanging on by a shoe string and doesn't know when more funding is going to be allocated.

@Brandon , Look into Allocated Utility Service.  

@John Lindenauer I currently use Equity Trust for my SDIRA to which I have a portion of it allocated in a TD Ameritrade brokerage account that I control.   

Or perhaps allocating some of this to some sort of private lending fund? 

You can be allocating your time to do other things in your business.3.

Depending on the business plan and how the 1031 proceeds are allocated, you can run into a situation that creates cash and mortgage boot.  

All your classic retirement funds (401ks/IRAs) slowly shift from stock to bond allocation as you age showing income production is generally more important than value appreciation as you age.