Borrowed or Gift Funds for Down Payment

[Ryan Redenius]

Hey all - 

I'm looking to do my first investment in a 3-4 unit multi-family in Chicago.  Due to circumstances, I don't anticipate being able to occupy the building - so I'm prepared to put 25% down.

However, I spoke with a lender today and they informed me that no borrowed or gift funds would be approved for the 25% down payment.  I'm partnering with someone who is loaning me the money for the down payment, so it's by no means a gift, but I was told it doesn't make a difference. 

There is a work-around if I wait over 2 months since they won't check back that far in my account history, but I'm wondering what other options I have.  I know that investors use other people's money all the time so clearly I must be missing something...

Thanks in advance!

[Chris Mason]

@Ryan Redenius,

In all probability your lender will not present this option because she or he doesn't know it even exists, but you can in fact formally secure the debt by a piece of real estate other than the subject property and then it's fine - provided your DTI still works after hitting you with that monthly debt obligation.