Will the bank go for this arrangement?

[Nicole Heasley Beitenman]

I'm trying to get a 6-unit apartment complex. I can't technically afford the down payment. I'd like to get the sellers to finance the down payment. 

I have some money sitting in my account that I received from a HELOC on another investment property. ALL of that money has to go towards the debt on the property, and there's no way around that. But if the bank wants to see I have the cash for a down payment, I can let that cash sit in my account a little longer.

My concern is that the bank will want to see me actually hand that money to the sellers. Is there any way to make this plan happen?

TIA!

[Jeff Copeland]

Seller financing the down payment with a second position note may be possible with some lenders. 

What probably isn't going to fly is pretending you're going to use the cash in your account for the down payment, but trying to sneak in a private mortgage note with the seller instead. Both mortgages (the bank's first position note, and the seller's second position note) would normally be prepared executed at closing in a situation like this. 

Your HELOC cash can certainly be used to show you have the necessary reserves on hand to meet the bank's underwriting requirements, but you probably need to be above board about the seller financing and find a lender who is okay with that.