Notifying Bank of Hard Money Funds for Down Payment

[Tory Brown]

Hello all BP-ers!

I am currently under contract on a 4-plex in the Butte, Montana area and I am beginning to consider hard money lending as an option. I tried to undergo the HELOC process on a different rental property that I have in order to pull some equity out and use for the down payment. Today I just received the news that my debt-to-income ratio is just over 40%, therefore the bank is unwilling to provide a HELOC. I don't have any credit card debt but I do currently have 2 mortgages that I am making payments on and that is the main reason why my DTI is over the allowable limit. I might try the route of cash-out refinancing in order to get the funds for the down payment but I am worried that that might not work out as well.

My question: If I find a good hard-money lending deal and am able to get the cash for the down payment, I am wondering how to tell the bank that I now have the funds to support the down payment? Will they be weary of lending to me because they are going to think that it is a "gift" and therefore won't lend to me? How would you let the bank know that you can move forward with the deal without letting on that you received the down payment funds from a third party?

Thank you all for your help in advance!

-Tory