First, ALL loan rates have been inching up during 2018 thanks to the Fed raising the prime rate. But remember it's more than the rate - it's the origination fee(s), points, assessments, etc added to the loan that add to total loan cost.
Whether you should use a standard homeowner mortgage, or use a HELOC (IMHO) depends on loan cost. Go with the loan that your property 'qualifies for' that has the lowest cost.
BUT... I just gave a peek inside the lender kimono. EVERYTHING depends on the subject property's condition.
During the loan process, the lender will usually ask for a property assessment (costing you ~$350), and determine based on the property's condition what loan package(s) it would qualify for. From generally lower cost to higher cost here... In general, if your subject project is relatively recent (built after 1980), and is "almost perfect" (ex: needs only paint, and carpet) it can 'potentially' qualify for an FHA loan. I try to get FHA loans through my local credit union because the interest rates, points, and loan origination fees are lower.
If it's an older home with (for example) aluminum wiring, or something that would disqualify the property from an FHA loan, you may have to go with a commercial loan. My commercial lender will loan on properties up to an assessed condition of "C6", but if your subject property assessment shows as a C5 or lower, you have to find a different financing option. Seller financing would be next on *my* list, followed by 'hard money' lenders, followed by an all-cash transaction.
But again, this is based on *my* experience, and may not reflect what other investors have experienced.
