You and I and @Jay Hinrichs: and @Don Konipol: and other very experienced investors have been really clear about the consequences of not following the law and not using best practices.

Are there going to be any adverse tax consequences? 

I could see this fit into several categories of 'real property trades or businesses.'

A reappraisal at today’s values would let me pull out around $20K in equity, which I could use toward another rental property.The trade-off is cash flow.

Most landlords do qualify for the "trade or business" IRS classification.Maybe you need a better accountant.

A taxpayer will be considered a real estate professional if (1) more than one-half of the total personal services the taxpayer performs in trades or businesses are performed in real property trades or businesses in which the taxpayer materially participates and (2) the taxpayer performs more than 750 hours of services during the tax year in real property trades or businesses in which the taxpayer materially participates.  

I am a nurse practitioner by trade, absolutely love my job, but it is demanding and I would love to scale back and be able to spend more time at home!

We are possible looking to use someone's trade line to help with the refi since our credit has taken such a huge hit over this situation.

Consequently, new homes in these locations start at $550,000.

People have such low rates that they aren't "trading up" in favor of staying put.