Bank stated that HELOC CAN NOT BE USED AS DOWN PAYMENT

[Account Closed]

I have heard so much about people successfully using HELOC as a down payment for investment property. Decided to do the same. We owe 95K on our primary residence, wich is valued around 200k. Went to the bank today, the same one which we have our mortgage with. Before applying I decided to ask if I could use the HELOC for down payment on an investment property. Here was the answer " Technicaly, if you were to disclose to us that you are going to use HELOC for investment purposes our rules are that you can't use HELOC for that"

So here is my questions. How do you interpret that answer? 

[Alexander Felice]

I interpret that answer as "It's only a problem because you're yapping about it!".

It is technically against the rules for most larger banks, as it can cause some lenders to worry as downpayments are supposed to be cash to increase equity, using borrowed funds defeats this purpose. That said, no one cares what you use it for as long as you meet underwriting requirements. No one will say anything if you don't and it's done every day.

As the saying goes:

Don't start no ****, won't be no ****  ;)