Line of Credit as down payment on FHA ??

[Mark Douglas]

Has anyone been successful using a personal line of credit as down payment funds?

[Jeff Dulla]

@Mark Douglas Yes you should be able to. See fha guides below:

7. Loans and Grants as Acceptable Sources of Funds

Introduction

Change Date

4155.1 5.B.7.a Collateralized Loans

This topic contains information on loans and grants as acceptable sources of funds, including

 collateralized loans who may provide collateralized loans disaster relief grants and loans, and FHLB – Homeownership Set-Aside Grant Program.

January 31, 2011

The borrower may obtain a loan for the total required investment, as long as satisfactory evidence is provided that the loan is fully secured by assets such as investment accounts or real property. These assets may include stocks, bonds, and real estate other than the property being purchased.

Certain types of loans secured against deposited funds, where repayment may be obtained through extinguishing the asset, do not require consideration of repayment for qualifying purposes. The asset securing the loan may not be included as assets to close, or otherwise considered available to the borrower. The deposited funds can be used for

 signature loans on certificates of deposit loans on the cash value of life insurance policies, or  loans secured by 401(k) accounts.

Reference: For more information on collateralized loans, see HUD 4155.1 5.B.7.b.

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