Department of Treasury with usc exceptionState Tax LienLien by USA or Dept of JusticeUS Department of StateOther Federal AgenciesFrequent Superior Foreclosure-Liens:HOA or condo feesCode Enforcement for debris removal or mowingDemolition or Environmental Based LiensState child support lienBoard of County Commissioners for special assessmentsUtility LiensWater/Sewer Delinquency (only in selected states)County (and/or School/Township) for unpaid taxesCity for road improvements, maintenanceHere are some of the judgment and liens that will be wiped off from the property (not the borrower who lost the title) if the lien holders were properly notified and "had the right to bid on the property at the auction":2nd and junior position mortgages, such as home equity loans, etc...Credit Card Judgments recorded after the foreclosing mortgagePersonal Judgments recorded after the foreclosing mortgageMechanic's Liens recorded after the foreclosing mortgage

Therefore, Lenders will allow you to Borrow $100k because of their appraisals.

I would assume that only 187.5k (75% of 250k) will be available for you to borrow, so you'll only likely get 87.5k from your HELOC.

What are people's thoughts on borrowing from your 401k to get the initial capital?

A HELOC is what we call an "Open End Mortgage" that is money can be drawn down up to the loan limit by the borrower.  

I am always glad to answer any financing questions.You can borrow for up to 10 conventional mortgages! 

PROPERTIES LISTED FOR SALE For a rate and term refinance transaction, the borrower must evidence that the listing has been cancelled, and must not have been listed for sale as of the date of the application.

The borrower must have sufficient funds to cover borrower-paid closing costs and fees at the time of settlement.

Yes, the Bank will see it, primarily because as a borrower you are required by federal law to disclose the other loan obligations on your application for a mortgage loan with them and if you don't it' a federal offense and a felony in all 50 states.  

Debt/Income Ratio - this could be a problem as you indicated... good thing about FHA is that you can use family money as a "gift" for a downpayment so I would recommend the same thing Cory did above with borrowing from your parents and paying them back using cash flow.3.