I completely agree with @Ashish Acharya's points about the cost-effectiveness of a HELOC and the potential credit implications if it’s secured by your primary residence.

Loan terms seem reasonable.

Living and working overseas can present unique challenges when it comes to securing financing, but there are definitely loan options designed for situations like yours.

A policywith a higher premium may be a better deal if it does not have a wind deductible.There are many endorsements that are available on the homeowners policy.

They are just going to use their 2nd VA loan to buy their next one while this one is tied up. 

Quote from @Juan Ruben Cortez: I believe the funding fee is 0.5% of the remaining loan balance, plus maybe another $500 - $1,000 in lender fees. 

Stop reading if you want.2) I couldn’t guess what “There is a 6 months of grace period before interest payment begins” means.3) They call their $3555 charge a “Loan Fee,” stated a few lines up as 2%. 2% of $235,000 (loan amount) is $4470.4) Do you seriously believe the loan fee, “… IS 100% REFUNDABLE IF THERE IS ANY DEFAULT FROM THEPART OF THE LENDER OR IF THE BORROWER CHOOSES TO TERMINATE THE LOAN.”5) It’s okay to pay an appraiser directly.

If I got a home equity loan for Property 1 and used the proceeds as downpayment for Property 2 and then got a 2nd loan for the remaining 75% purchase price for Property 2, when I sell Property 2, can I use the Property 1 loan as part of the cost basis for computing Property 2 capital gains?

I doubt he'll be able to quality for a loan (VA) with just his income. 

Most min loans amounts are going to be 50-100k, so an issue there.