This part applies to all real property loans, and all lenders making such loans, as those terms are defined in § 591.2 of this part.§ 591.2 Definitions.For the purposes of this part, the following definitions apply:(b) Due-on-sale clause means a contract provision which authorizes the lender, at its option, to declare immediately due and payable sums secured by the lender's security instrument upon a sale of transfer of all or any part of the real property securing the loan without the lender's prior written consent.

Follow the proper procedure defined in the agreement. 

A simpler solution may be to make a gift (as defined by IRS) or no- or low-interest loan, but this way loan is backed by house and my mom is able to capitalize on lower rates for the mortgage.

I'm not a fan of flushing agents, but 410a reverts to an acid at the slightest sign of moisture or contamination and makes a substance that clogs all of your components of the system and it's a royal pita to get that contamination out.

Standard HELOC or 2nd is way safer and defined. 

I would definably refinance.

On the other hand, this recession is not being caused by poor standards, or greedy businesses or over investing, (Animal spirits as our current economic system would define it).

As long as both houses meet the minimum property requirements as defined by the VA and they are on the same tax parcel, I think it is possible. 

That contract defines the relationship, and you get to write it.

The term LTV gets thrown around loosely in this industry to say the least so make sure they quote define what your gross loan amount will actually be because there will be an ARV cap as @Nathan Cross alluded to.The loan structure you quoted is quite common but in most instances, you will need to have the liquidity to up front the rehab costs and then you will get reimbursed based on a percentage of completion.