Abstract: A reversible heat pump provides multiple heating and cooling modes and includes a compressor, an evaporator and heat exchanger all interconnected and charged with refrigerant fluid. The heat exchanger includes tanks connected in series to the water supply and a condenser feed line with heat transfer sections connected in counterflow relationship. The heat pump has an accumulator and suction line for the refrigerant fluid upstream of the compressor. Sub-cool transfer tubes associated with the accumulator/suction line reclaim a portion of the heat from the heat exchanger. A reversing valve switches between heating/cooling modes. A first bypass is operative to direct the refrigerant fluid around the sub-cool transfer tubes in the space cooling only mode and during which an expansion valve is utilized upstream of the evaporator/indoor coil. A second bypass is provided around the expansion valve.