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Old 02-24-2008, 08:03 PM
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Can you take out a personal loan to finance the down payment on a commercial loan?

I'm interested in a multi-family apartment complex (5+ units). Assuming all of the other lender specifics are met (i.e. the debt service coverage ratio). Do they look at the borrowers personal debt and compare that to the down payment, or do they not care as long as the borrowers credit score is high enough? Thanks!
I'm not concerned about whether or not I can get approved for the personal loan. I'm interested in whether or not, if all other commercial lending criteria are met, the commercial lender would approve the loan with the down payment financed through a personal loan.
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Old 02-24-2008, 08:06 PM
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Any lender will look at the borrower's ability to repay a loan, and that includes investigating otter liabilities the borrower may have. If you can get a personal loan to make a down payment on the units, you are still financing 100 percent of the units. The lender of the personal loan is then taking part of the risk of your investment, and would be unlikely to lend you the money for that purpose. In effect you would be shifting all of the risk of the purchase on lenders with no investment on your part.
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