untapping free & clear owner-occupied home equity

[James Wong]

Hey everybody!

I have convinced a family member to join the real estate adventure. (they saw a lot of success from me learning off BP!)

With a free & clear property, this individual is retired and receives pension benefits. This person lives in the f&c home. Individual wants to use the untapped equity from their home. Their DTI limits the LTV to 20%. Was hoping to get an LTV of 70%. Proceeds of this would be used to purchase a commercial property, effectively servicing the debt, and then some.

1) Is there a loan when the collateral of the free & clear property can be pledged as the down payment for a commercial loan? or,
2) Is there a refi loan that can qualify income of an investment property, not yet purchased? (requiring two loans to close simultaneously)

I am stumped on creative ideas here. Any input would be nice.