pledge equity in primary as part of downpayment for commercial loan

[Jonathan Santiago]

Hi All, 

Long time listener, first time poster.  We are working with the commercial arm of our local bank as we are looking to purchase our first investment property.  We have cash saved up for a downpayment, but we also have close to 50% equity in our primary residence and they have told me we can also pledge part of the equity in our home as part of our downpayment, essentially increasing our buying power or reducing our cash outlay for the downpayment.  I've been scouring the forums, as well as directly asking the loan officer, but still not getting 100% clarity--is this something that is commonly done?  it seems a little too good to be true, like it's free money (while putting our house at risk, of course).  Can anyone explain the mechanics of this type of transaction?

Thanks

Jon