As I research the VA Construction Loan, it seems much harder to complete, but as Brandon Turner says, choose your hard.

The property is currently residential but zoned for commercial use as well if we choose to stop using it as a rental property.

The agreement can be under your name or your business name, I'm a big believer in doing business under an LLC so that would be the route I'd choose but it is not mandatory.Hope that helps. 

It's great you the options you have with the $300k, but realize it is difficult to try to figure out what is the best path to choose.  

We have one of the lowest mortgage default rates in the country.Redfin also says that as the pandemic slows down more people will choose to live in cities where rent is more common.

Hope this gets you started and questions you can ask whoever you choose as an advisor.

@Stuart Hoffman3-5% is only going to be possible on an FHA loan.The lender/broker you choose should be familiar with house hacking and what it is you are trying to do.  

How important is a cap rate to you when choosing to invest in an asset or an area? 

I could have bought three different houses this year; I choose not to because the prices were too high.

I would 100% leverage my cash/working capital with a bank.Im sure you can lock into a low interest rate, and if you choose to aggressively pay it off, great, if not, great!