And the bank is still only borrowing at 80% LTV; there's a higher chance now that i get that refi because the amount i'm requesting would probably be closer to that 80% then the appraised value of the house right?.

Here, you would make a loan with your own money and use the note as collateral to borrow additional money.

Definitely get an appraisal if you think the house is only worth $20,000.00If it is correct that you said it's new construction, and almost done I'm sure it worth well over $20,000.00If the houses in the area are going for substantially more Ray Charles can see it a $100,000.00 house or more you don't need to have your borrower pay for an appraisal.

His selling point was a lower interest rate + your money earning while it's in the CD and borrowing against it.

He needs to be added as a co-borrower. 

YOu could say, Hey Rick, can my IRA borrow 40k to do a rehab??

It is the greater of either 1% of the outstanding balance or the reported monthly payment on the borrower's credit report.So, deferring student loans to be able to get an FHA loan will no longer happen.What you can do is go in with a co-borrower/partner/parent that will increase your borrowing power.

Also, borrowing at these larger amounts means you can get lending at wholesale.

Let's say you're just starting out in real estate and have one SFH rental free and clear with no mortgage borrowing history. 

Believe it or not borrowers tend to fall asleep at the wheel unless they have to write a check each month.