Using a HELOC for a down payment

[Brad Waterstraat]

Hey everyone!

About 6 months ago, I came across BP and FI and I haven’t stopped learning about real estate investing since then. As a new investor, I feel that house hacking would be my best option.

I live in the Chicago area, and I recently got approved for a loan. I planned on using what’s called the home possible loan, which is a conventional loan that lets me put 5% down on a 2-4 unit property. As you may know, prices in Chicago are not cheap and I want to use as little of my own money as possible.

I don't own a property myself, but I know people who own properties free and clear. Would I be able to use a HELOC from the equity in their property to pay for the down payment on the property that I purchase? Then the rest of the purchase price would be funded by the previously mentioned home possible loan?

If so, does anyone know exactly how this would work and the steps that I would have to take? If anyone has done this before, I would love to hear your experience!