My suspicion is that the issue is not the refinance but the cash out refinance which would make your LTV too high for most lenders' standards.

Would also be curious what standard market rate would be.

It’s akin to paying up in a hostage situation; tough call and it’s fair to say if it becomes a standard practice it’ll become a common practice.

@Dean Taylor You can read about these kind of loans on the HUD website : https://www.hud.loans/fha-221d4/In my opinion, syndicating equity and getting a standard commercial loan would be a better option in most cases. 

Of course the standard answer: "comps."

Looking at the items that need attention, it seems pretty standard for a turn.

  $15-20 per hour is standard which might be a bit high given the ease of the tasks but you need to take into account the fact that they are driving out and disrupting their life for what is often a 10=30 min task. 

- JeanNote: The seller needs to a fast close so standard lenders aren't an option. 

Can you explain the new 20% deduction ?

If you rent a room that totals 20% of the property, that will be the only deduction/benefit you'll be able to take.