Investment property question

[Ari D.]

Hi,

I recently bought a studio 2 weeks ago citing it as my primary residence for loan purposes. My realtor found me a really sweet 1 bedroom deal that I just got into contract with and would love to move into and use it as my primary residence (while renting out the studio obviously) not on paper unfortunately since my lender (BoA) wouldn’t allow me to switch properties. Therefore, they are asking me to put down 35% for the 1-bedroom investment at a higher interest rate too. I’m a first time buyer and took the plunge of dabbling with buying multiple properties in a short span to diversify my investments. I would really like some advice on what are some of my options to 1. get the lender to agree on lower down payment 2. switch residence type, if these are possible?

Additionally, considering my situation, my lender, who I have a long banking relationship with, offered a HELOC after a year on this investment property up to 80% of the appraised value (which should be higher than purchase price IMHO), but I'm absolutely not familiar with HELOC and/or its tax implications. Can a noble soul please help me out here to understand these options and navigate with confidence?

Thank you so much in advance!