If the numbers work like you are suggesting then I am sure you can find a lender who will do that deal. 25% LTV is a safe investment for a lender. 

Thanks so much for the response, and the suggestion.

That is not possible within IRS rules, other than by taking a (potentially taxable) distribution from the IRA.The questions I would suggest you ask are related to keeping the Roth IRA as a tax-sheltered vehicle.  

I would suggest that you interview several Realtors and ask them the following questions, to ascertain if they are truly Investor Friendly, or if they are throwing you a sales pitch.1.

@Lisa Hill,  I suggest you plug "Note Flipping" and/or "Jerry Norton" into the search window (upper right ) and there are several threads which address this question.

I would suggest the podcast webinars and the education tab at the top, its truly so much info its almost over whelming. but if you have any questions about anything investing please just ask people here are more then willing to help you out.AJ

Any suggestions on agencies that are willing to insure during the rehab process?

Plan would be to complete the simple renovations, find a quality tenant, then refinance to pay off the HELOC.

I suggest networking here on BP in some of the local forums.

Reality is they'll probably never sell this property as-is for 20k, but due to my involvement I know all the details to justify that cost.I'm looking for suggestions on if this deal could even happen, would anyone fund something like this in Illinois?