Of course, you need to first check with the rules and laws that govern your responsibilities as a landlord.  

For example:  The sales price is $120,000 the rehab is $30K and the after improved value is $210,000.  

Afaik they are just coming out with rules etc so maybe not much is known yet....

Not be answered on here, but why can your credit not be improved over the 12 month span of the HM loan?

Unfortunately, it sounds like you would be throwing good money at bad if you try to do any improvements.

I know many investors want to see the 2% rule, but in this area, I'm not sure that is reasonable unless my first property was one in desperate need of rehab.

All the rules might be very location specific. 

I won't rule out all housing involving HOAs as obviously there's always potential for good deals, but definitely will be extra cautious of them in terms of what rules certain states abide by in regards to them and how those terms can affect the deal.   

I do have a binder with house rules and some specifics to the house.  

Although market conditions improved, I felt that we didn't have enough equity to pull out of the house and do the work, so I decided to take a 20k personal loan out.