using HELOC for down payment

1 Reply

I am in the process of getting a HELOC which I will then use as a down payment for my next investment property. My plan is to get 5+ units and get a commercial mortgage. Is there any "seasoning" requirements for down payment funding. Should I take out the money from the HELOC and put it in a bank account, wait 2 months and then start looking for a investment property? I know for conventional mortgages 60 days is standard but not sure for commercial loans.

If your plan is to get a commercial loan I would try to have that lined up and pre-approved before you start paying interest on the HELOC money. Generally there is a seasoning requirement however every lender has their own criteria case by case. One suggestion is to get a longer closing date on your investment property so that you can get the seasoning period in. Give them a due diligence or earnest money fee, from the HELOC if needed, for their time and see if they would work with you before you go under contract if for some reason you needed the extra time. Sounds like you have a good start to a great plan, Good luck.

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