Our terms right now are 7.95% (adjustable after 5 years) 30 year mortgage. 

Plus the tax benefits are great. 

The benefit to the 203(k) loan is that it can work with a lower credit score and it has a lower down payment (3.5%). 

The other suggestions are good, creative ways to”ultimately” receive the benefit of the $10k but none of them will allow me to immediately offset my repair costs, which is my goal.

Again, a rental agent will be helpful in knowing current prices, paying a half or full fee to get them to screen and place a tenant would have the additional benefit of having this conversation with them to gauge your market.Ultimately since you have some flexibility of schedule and funds I would say do your first live-in upgrade from existing funds and get the other units rented closer to full market rate.

My wife and I did the same thing and are still, 16 years later, reaping the benefits from that decision.  

if yes compare with your current lender see which route will benefit.

I am a licensed and bonded Public Insurance Adjuster as well as an experienced skip tracer.

Being able to get the same rate for those three years presents a benefit to the potential buyer.

This is just one benefit.