HELOC as a down payment?

[Tarcisio Mora]

Hello everyone I been looking for deals and I am considering on using my HELOC to put as the down payment for a multi family rental, my question is can I do that? And if so how would I?

[Mike H.]

You can definitely pull out cash from a heloc to use as a down payment on a loan for a multi family purchase. In terms of how would you do that - when you go to close on your purchase of the MF unit, you would bring a cashier's check to the closing for whatever the down payment amount is.

Is your heloc with a local or national bank that has a branch near where you live? If yes, then you'd just go into the branch and ask them for a cashier's check to be drawn from your heloc. Take that to the closing and you're done.

ie.. Lets say you had a BofA heloc of 150k available to you. You get a MF property under contract for 500k and the down payment is 125k. The day of the closing, you go to BofA and ask them to draw 125k out of your heloc and give it to you as a cashier's check made out from your name to the title company's name of the closing (most closings require it in the title company's name but you might want to check).

Show up at the closing with the cashier's check and voila, you own the property.