Can't use HELOC to pay for part of my down payment?

[Luis Nunez]

Hello, I'm from southern CA and just got transferred to Houston, TX. I'm keeping my primary residence as a rental and buying a home in TX to use as my new primary residence. I need about $17K more to come up with the 20% down payment on the home I want to buy ($50K total down), so I was planning on using a HELOC from my current home to come up with the $17K. I have about $250K (50% LTV) in equity on that home but the lender I'm working with told me I can't borrow any of the money for the downpayment, so I have to go with a FHA loan instead of a conventional. Is that correct? Thank you in advance for all of your help!

[Denny Robert]

Ask a new lender. That doesn't sound right to me.