That would be $87,750.My question has two parts.1) If I take the lended $87,500 along with my $14,000 (min) I fall short of fully funding the reno. 

If it must be treated as cash out refi, can investing in stocks/bonds allow the interest to be deducted?  

I have sent them prof of funds, the problem was with my pension, their immediate and my immediate are 2 different things apparently.

My original impression of rent to own was that it’s the same as regular rental, but with a buy date and additional funds being given as option fee.

I'm not a mortgage lender, but in my opinion, once they have funded the deal and the title has transferred it should be a done deal. 

What we struggle with is finding the funding for the remodel itself.Does anyone have any suggestions for us as to how to get the funding through the bank?

You have the funds to be a part of the strong market here.  

There aren't many investment vehicles in a TSP aside from the funds the few funds they have.Would it be possible or even legal (I know, seek professional legal advice yada yada) to continue contributing 5% (or more) into my TSP to take advantage of the "free money" being matched by the government and then roll the balance every year into a tax deferred SD-IRA so I can invest that money freely? 

And while it sounds all "tough guy" to say you or your cronies will keep mum when the IRS asks questions.....that is not what happens in practice when they shine the light on you.Tracking source of funds to a separate LLC that you funded in  a "private" state - even if it is "owned" in "someone else's name" (aka via a nominee) is easily done if you are the IRS. 

I want the real estate part of my portfolio (I also invest heavily in index funds) to be as less risky as possible.