I would love if I could free up my VA loan eligibility again and refinance as something else, but not sure if that's possible or if it would mean having to pay PMI. 

That would create a self-dealing prohibited transaction and invalidate the IRA with severe tax consequences.The only way you can add capital is via normal IRA contributions if you are eligible.  

There's also manufactured homes that could be eligible depending on the quality you're looking for which you can get from the manufacturer. 

My car insurance would pay but I have a $500 deductible which I really dont feel like paying because this wouldnt have happened if the property would be properly maintained. 

Tom I have talked to Lexus Nexus and I do look forward to subscribing when I become eligible.

After taxes, insurance deductions etc Ill be taking home 190k a year.

My question is: Can I deduct the interest expense in California (11% tax) where the house is while using the money in Massachusetts?  

As expected, there is a deductible for this insurance coverage.

@Melanie PendreyThis will complicate your tax situation...Mixing HELOC proceeds for whatever you need whenever you need means you need to trace and track proceeds to determine interest deductibility. 

The only one I think I'm eligible to use (remember, I'm in TN) is Wells Fargo, and they only go to 65%.