Downpayment Funding Options

[Matt S.]

Hi all - first post here so bear with me, I’ll try to keep it concise.

In short, I’m preparing my finances here to put me in a position to purchase an investment property. Due to new COVID-19 developments, it’s my understanding that banks are asking for 25-30% downpayment as opposed to traditional 20%. As a result, I need a little more money to make up this difference. I have a family member who is willing to front the difference of what I need (will probably be between $10-20K depending on price point).

My dilemma is that banks will see this as a gift/loan and will not accept it. My research thus far has given me a few options:

1) season the money for ~60 days.

2) pull from my IRA for the difference and recontribute within the 60 day grace period. Unsure if this is actually a valid move anymore; however, not much a fan of this.

3) form a legal partnership and proceed with partner as the mortgagor. Not too much a fan of this either, just given the inherent complexities this can add. Nor does he have much of an interest in that route.

4) look at properties with a lower price point

Im aware that I can be patient and can build the reserve I need within the next 6 months. I’d simply like to be ready during the summer months here as it is most conducive to my work schedule. I’m wondering if anybody can provide some creative ways to workaround this or provide a little guidance on next steps, as I’m struggling a bit to find answers. Any advice/tips on the above is also appreciated.