Airbnb house purchase with investor money

[Nick Keskey]

Hello,

I am trying to purchase a single family house that I would like to use as an Airbnb. As the purchase of the house would be an investment property the bank requires a 20% down payment. I would like to use an investor to help me provide the down payment. My loan provider said that if an investor provided money at closing, their name would need to be part of the loan. I was told that I could only use investor money and not include them on the loan if this was property I was going to live in (or be a second home). I would like to keep the loan in my name alone. Is there any way a loan can be set up to complete the purchase of the house with investor money without including their name on the loan?

[Account Closed]

Originally posted by @Jimmy Woodard:

Why would the bank need to know you're working with an investor? If they're a silent partner and transfer funds to your account, I don't see why you can't have just your name on the loan. Maybe I'm missing something here...

The bank is looking at Debt to Income Ratios. If it is money you already have, it doesn't affect your DTI. But, if you borrow money for the down payment, you are making an additional monthly payment the lender doesn't know about. That increases their risk unfairly.

Also, the increase of the DTI may make the loan undoable. If the loan is backed by the U.S. Govt (FHA, VA, Fannie Mae, Freddie Mac, USDA) then it affects the insurability of the loan. Not to be too blunt about the matter but giving false information on a federally backed loan is a felony. It usually is caught if payments ever get behind and then they audit the loan.

Why not do things the right way? No property or opportunity is worth the risk you are describing. I know it is an honest question, so I am giving you an honest answer.