HELOC for down payment

[Michael H.]

My personal home is paid off and I am looking to obtain more rental property. I have a HELOC (I am going to switch back to an interest only loan) but all of the bankers I have talked to say I can not use it as a down payment for another mortgage to obtain another buy and hold.

I have used an interest only loan to purchase, remodel, and sell a flip.

What do I need to know?

TIA

[Kerry Baird]

If you take a cash draw and set it in another bank account to season, this cash for down payments may be looked at differently.  The key is to not draw too much, as it will affect your debt to income ratio.