HELOC to fund multifamily down payment; mortgage brokers reaction?
I’m looking to purchase a smaller multifamily property, around 10 units and fund the down payment with a HELOC. The goal is to have the cash flow cover both the property and HELOC debt service. I will have a separate loan guarantor participating in the deal. Two questions:

1. Will mortgage brokers be ok with the HELOC being used to cover the down payment versus cash given we have a loan guarantor?

2. How is the loan guarantor typically compensated; a fee or in equity?
[{"id": "ilvdqmi", "text": "Why do need a loan guarantor for a commercial deal? Some lenders are okay with the DP coming from a HELOC, some aren\u2019t. May be easiest if you put the funds in your savings account for a few months first.", "replies": [], "depth": 1}, {"id": "ilvdsy3", "text": "Try to find a heloc with partitioning so you have a fixed payment; ask your broker what CLTV is allowed (doesn't matter if it isn't a blanket so much), if you debt qualify, and the HELOC isn't a lien on the multi, then the lender on the multi won't care so much about CLTV.  A guarantor is just someone that is on the hook if you default and there is a shortage from the FC sale.  You have to work that out with them.....It's just as bad for the guarantor as being a co-borrower, and you wont' get a better deal with a guarantor, so you might try to avoid having one at all.", "replies": [{"id": "ilve2k9", "text": "Is having a guarantor something that\u2019s more broker dependent then?", "replies": [{"id": "ilvecyi", "text": "Every broker deals with multiple investors, that's why you go to brokers, so yeah, every lender/program/investor is different.  I have incredible multi-unit investors that are super flexible about the collateral; it's score driven mostly 660+.", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "ilvghs1", "text": "1. Most lenders are fine with this but will include HELOC payments to your debt service calculation on the property so make sure you have enough room on a DSCR basis.\n\n2. Guarantor compensation is highly variable but frequently they're paid an annualized fee of 1-3% of the outstanding value of their guarantee - accrued or paid monthly depending on the deal structure.", "replies": [], "depth": 1}, {"id": "ilvm4mp", "text": "My understanding of commercial loans is limited but for the three that I have, I and my partners are guarantors on the loan. There aren't any outside guarantors, just the owners in my case. Also, if you can pay the HELOC with your regular income, you should be fine. They will look at the dscr calculation on the new building and as long as it has a dscr of 1.25 or better, you should be able to find a lender. Be sure to run your numbers carefully. Commercial Insurance can be more expensive than you would think.", "replies": [], "depth": 1}, {"id": "ilvt6jn", "text": "In my experience the big banks won\u2019t allow it. Your local and regional ones many times will.\n\nBecause it\u2019s basically 100% financing, it\u2019s tougher to find cash flow buildings, but it can be done.  Just more hoops to jump through.", "replies": [], "depth": 1}]