203k vs 401k to purchase a fixer upper

[Yoshioka Jones]

We are in the process of purchasing a home via an FHA 203k loan. Due to all of the fees associated with the loan, we are considering using money from our 401k to purchase the home and using cash and a smaller loan for repairs. This would save approx $13,500 in fees associated with the 203k loan.

Once the repairs are complete we would like to use the equity in the house to pay our selves back and consolidate 2 loans into 1. 

What type of vehicle would we use to pay ourselves back? Home equity line of credit? Or a cash out mortgage? 

Has anyone ever purchased a home in this fashion?

What are your thoughts on a cash purchase vs 203k loan? 

Thank you