HML Requirements for "Skin in the game"

[Alfredo Alfaro]

Hello everyone, 

I was wondering if HML "Require" that the 15-20% be "your" funds or if it can be from your partner, if in a partnership, or if it can be from family or a PML. Just asking if the funds strictly have to be your funds and if those funds have to have been in your account for a specified amount of time. I understand that HML should be fairly easy to attain but it seems like some of the requirements that are asked of are somewhat the same as traditional lenders on some of the requirements.

I have funds currently but want to know if alternatives for the 15-20% are available. 

[Jeremy Horton]

The lender is going to want to know where the funds for the downpayment are coming from - I've used my own money and 401k loans thus far with no problems. As far as how long the funds have to have been in your account - I generally make a transfer a few days before closing - basically when I know the house is going to close. Seller finance or private money hasn't been a problem for me so far either, come to think of it. 

If you're funding the downpayment with another loan - I'd be positive this is something they would want to know about. This, for obvious reasons, increases their risk

You're kind of using HML/PML in a weird context here - this is generally going to be a short term loan for a rehab of some sort OR you'd be using a HML/PML to cover a downpayment in a DSCR or conventional type loan. It's almost always to use your own money here since you will inevitably be refinancing into a DSCR or conventional type loan. And you'll save thousands in interest.

What are you trying to do here - like what is your strategy?