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. A programmable microprocessor activates the first bypass in the cooling only mode and deactivates the second bypass, and vice-versa in the multiple heating modes for said heat exchanger. In the heating modes, the evaporator may include an auxiliary outdoor coil for direct supplemental heat dissipation into ambient air. In the multiple heating modes, the condensed refrigerant fluid is regulated by a flow control valve.