Debt service ratio loan if you have good credit can help.

I am considering selling it and my realtor said we would list at $399k-  I figured it would be a good idea so I could pay off my student loans and other debt acquired from the pandemic.

You can get it fully restored to use again by refi'ing the first home out of a VA loan and then applying for a one-time reinstatement (I just did this, so yes, it is possible), but its just as the name implies-'one time'-so if you go this route and buy a second home after restoring your full entitlement you'll have to 'dispose' i.e. sell the home(s) to use it again for the third one.  

@Andrew JacksonThe tax implications will depend on how the funds are given to you.Are the funds given to you as 'debt' where there is a promise to pay back the principal along with interest?

How do banks look at STR income and debt in regards to DTI and purchasing other properties (whether short or long term)?

Take out as much of that sweet sweet debt as you can and let inflation do its thang

If I refinance the untapped heloc at the same time I’m under contract and the loan is processing, will that affect my credit or debt to income ratio?

You will have equity over $ 1 Million.This is why real estate is one of the best investments you don’t have to quit your job, you do not need any special degree, or skills.Now imagine, if were able to purchase 2-10 properties over the next 10 years, what would your financial situation look like.Real estate is the Magic formula that helps you get massive compounding and consistent returns over the long term with the help of debt leverage.9 Be prepared for problems.Investing real estate has several challenges, problems, headaches such as your tenant not paying your rent for few months or trashing your place.

She cannot refinance by herself because her income does not satisfy the necessary debt to equity ratio.

If you plan to hire a rental broker have you consider how the debt service coverage ratio might be effected by paying a one month broker fee