My first reaction is that I would go with the home equity loan at this time. Bear in mind that I am not one to get myself in debt so it may seem that taking the HEL would go against my grain (see below*).
That loan rate is very low, historically low. Of course, earnings on bank and bond interest are laughably low. But inflation is also running relatively low. There is some cost to the loan as interest you will pay, as you say. The counterpoint is there will definitely be cost as well to drawing from your 401K (are you able to draw from that without early penalties or other costs, only paying income tax on it?)
You can quantify both costs, even the tax on the 401K. This might provide an exercise for a long afternoon with your calculator and reference to IRS forms (or a visit to an accountant...for a fee). The taxes on the draw will depend on what other income you have (as the marginal tax rate might vary). And in fact, it might be advantageous to draw the amount over two tax years in order to minimize the tax rate.
(it occurs to me now that you can probably even use something like TurboTax on the Web to run through several scenarios of taking various amounts from the 401K and see how that affects your taxes...just don't end up submitting these draft scenarios to the IRS accidentally).
By taking the HEL now you can proceed right away without having to wait for funds to transfer, etc. And without being too distracted by the tax situation. You might find that when the projects are complete and you're paying the loan that you'd feel better by paying it off...later in this year. So at that time you might consider drawing half of the loan amount from your 401K in this tax year (2021) and then the other half in the following year; so you would pay down the loan in two lump sums (along with the normal payments). Yes, this might be the sweet spot.
But I would certainly spend that afternoon, or an hour or two, trying to guesstimate the taxes you'll pay on drawing the full $100K now. And then compare that to the interest you'll need to pay on the loan.
One more thought. It's nice to have my home as paid-off. But it's also nice to have cash in the bank to pay for regular living expenses and for any urgent needs that can come up. If I had that $100K project I would consider the same thing...taking that HEL versus drawing down my cash.
(*) my background: I have paid my credit cards off in full every month since around 1985, and not gone overboard in loans for cars or homes. Last two cars were bought with cash, and my mortgage was paid off 3 months before I retired 3 years ago.