HELOC used with Commercial Loan

[Michael Masters]

I plan on using both a substantial HELOC as well as a commercial loan (likely Freddie Mac or Fannie Mae) to purchase a multifamily.

Ballpark, I'm looking at the following:

$4.5M = Purchase Price

Funded with:

$1.5M = Cash & Investments to be Sold

$0.5M = HELOC

$2.5M = Commercial Loan

My question is whether or not Freddie Mac would include the monthly payment on the HELOC in the calculation of my DSCR ratio. Secondly, if they do, would I be better off taking out the HELOC 3 months early to "age" it in my investment accounts that way the HELOC loan is not considered as funds used for the purchase, but rather just an already existing loan on my primary residence.

Thoughts?

[Tom Keating]

@Michael Masters - To answer you question, Freddie wouldn't include the HELOC in the calculation of your DSCR ratio. However, they will require a Net Worth equal to the loan amount and Liquidity totaling 9 months of the debt service of that loan. The NW and Liquidity requirements are calculated based on the combination of the personal financials of all investors included in that purchase.

Feel free to message me with any further questions on Freddie SBL.