HELOC & Private Loan for Conventional Down Pmt - Closing Soon

[Jason DeFazio]

Hi - our funding situation has gotten a bit complex and we are well into the process of closing on our 3rd rental property. Looking for some help. 

We planned to use a HELOC on one of our other properties for the down payment (and some rehab). We plan to BRRRR the property. We cleared this with our mortgage lender, who said it was fine, and the debt service for the HELOC would just be counted towards our DTI. However, the credit union providing the HELOC initially told us we could get up to 90% LTV on our other property - they later said the max was 80% for investment properties. This obviously left us with less cash than we needed

We were able to secure additional private funding from family to make up for the reduction in HELOC funds. They are flexible as to how we structure the deal, and we do plan to securitize the loan using either equity in the property mentioned above, or a separate stock portfolio. We close in 15 days so there is no time for funds to season in our account.

Given the mortgage lender said using the full HELOC was OK, I'm hoping we can work through this - the private loan is just meant to replace the portion of the HELOC that was lost. I'm just not sure what questions they are going to ask next, or what documentation they'll need to substantiate the source of funds.

Hoping to get prepared and get a good sense of how this might play out by Monday. Any insight would be helpful

Thanks