hi! Im in southern ca & i know this question has been asked several times in the past but I wanted to ask if anyone in the Last 6 months has used heloc money from their primary residence as the cash needed for 20% down on a multi unit investment property? My mom was a lender up until she retired last October and she told me today that you used to be able to use heloc money for down payment, but that the rules have changed and now that money has to be in your bank account for 2 months (bc that's how far back the underwriter looks at). I have the equity in my PR, I can afford the heloc payment & easily still get cash flow on the multi unit, all I'm Wondering is if anyone has done exactly this in the last 6 months & if so, how long did the heloc $ need to be in your bank.
It depends on your lenders overlays. You can use the HELOC as a down payment, but the payment on it will count against your DTI's.
@Jerry Padilla thank you! Luckily for me, my mom was wrong haha. My lender told me it can be used for down payment but you're right, it does count toward DTI, which thankfully for me, is low. So now I'm on to step 2, finding a good unit.
Although the payment is slow to reflect on your credit, the money will have to be sourced dating back the 2 month period. So, they will see you pulled it from a HELOC and will factor in that payment with your DTI, if it has been seasoned for 2 months, than it will be reflecting on your credit already.
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