Using an equity partner for down payments for Hard Money Loans

Using an equity partner for down payments for Hard Money Loans

Real Estate Investor · Newport News, VA · Member since 2017 · 29 posts · 7 votes

Hey BP, I have been reading through some of the forums and I see some mixed opinions on this subject, Here's the question: If you don't have enough money for a down payment and your credit isn't the best and you deiced to bring in a partner 50/50 partner who has the money for a down payment giving you guys skin in the game. Would a lender not approve this loan or look down upon this? 

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  • Real Estate Agent · Garden City, NY · Member since 2016 · 3k+ posts · 1k+ votes
    9y

    @Rashawn Stevens

    Hard money lenders don't go by FICO. They go by the project numbers. If you need a partner for the down payment and out of pockets, just bring in a partner.

  • Real Estate Investor · Newport News, VA · Member since 2017 · 29 posts · 7 votes
    9y

    @Christopher Phillips Thanks for the advice.

  • Lender · Bethesda MD · Member since 2017 · 283 posts · 123 votes
    9y

    Hi @Rashawn Stevens!

    In my experience, a HML may allow equity partner funds for a down payment, cash-to-close, and loan reserves and also may allow gift funds.

    Also some may allow up to a certain percentage of IRA, 401k and other retirement money as well as marketable securities.

    These are all ways you may be able to get "skin in the game" money.

  • Lender · San Antonio, TX · Member since 2016 · 1k+ posts · 1k+ votes
    9y

    @Rashawn Stevens Yes this is very common if they sign on the loan with you

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