But at least you can know what you are getting into.As @Brian Adzadi pointed out, you want to make sure it is up to code, any renovations were properly permitted and professionally done, and that there are no violations that can surprise you down the road.

I assume the $200k house will actually cost me an extra percent or two in fees and closing costs (making the mortgage more like $154?). 

She has been paying me extra here and there to "save up" to replace the floors that were damaged. 

They've asked if I have any extra deals to pass them their way and vice versa.

I know of a few people that rented a dumpster and tore it off themselves, generally there is a small extra fee for potential asbestos siding. 

I pulled a permit to build a single family home, lined up the financing, etc.

Or ideally a home that has a legal “Ohana” (family) house or permitted ADU( Accessory Dwelling Unit).

@James O Nix I was just inquiring if there was a good reason to not pay off the entire amount...maybe there were extra fines or something.

They worked with the city, and the city issued the permit to operate it as a duplex. 

This will increase your current mid 3% rates into higher 4% rates so we'd have to do the math on it to see if by restoring your VA entitlement it will be worth the extra "premium," paid in rate and closing costs to refinance are worth it.