Use Your Home Equity To Buy
A HELOC on the home you own can help fund your next home. Fannie Mae accepts funds borrowed against real estate for the down payment, closing costs, and reserves.
What you need to use your equity
Each item below is a requirement of Fannie Mae or at least one home equity program we offer.
- On Fannie Mae, the new home equity payment counted as a debt when you qualify.
- On Fannie Mae, proof the lender on your home equity line is not a party to the sale.
- On Fannie Mae, proof the borrowed funds were transferred to you.
- On at least one HELOC program, a 600 minimum credit score on a primary residence.
- On at least one HELOC program, a home that is not listed for sale now and was not listed in the last 60 days.
- On at least one HELOC program, a line from $5,000 to $750,000, with lines over $500,000 for primary residences only and a 700 minimum score.
Fannie Mae accepts it
Borrow against a rental
Payment counts as debt
Not while listed
Draw at closing
FHA allows it too
Can You Use Home Equity For A Down Payment
Yes. Fannie Mae accepts borrowed funds secured by an asset, including real estate, for the down payment, closing costs, and reserves.
Fannie Mae treats borrowed funds secured by an asset as a return of equity, so they can be used for the down payment, closing costs, and reserves. Real estate is one of the assets you can borrow against, and the new payment is counted as a debt when you qualify.
Fannie Mae also asks for the terms of the loan and proof the funds were transferred to you. At least one HELOC program disburses at least 75% of the line at closing and has no prepayment penalty. Buying a second home? See our second home loan page.
FHA also allows collateralized loans secured by real estate other than the home being purchased, as long as the funds come from an independent third party. At least one HELOC program will not lend on a home that is listed for sale now or was listed in the last 60 days.
Why choose Saxton to use your equity to buy
For homeowners with equity who want to buy their next home.
Fannie Mae Accepts It
Fannie Mae accepts funds borrowed against real estate for the down payment, closing costs, and reserves.
Borrow Against A Rental
At least one HELOC program lends against a primary residence, a second home, or an investment property.
Payment Counts As Debt
On Fannie Mae, the payment on the loan secured by your home is counted as a debt when you qualify for the new mortgage.
Not While Listed
At least one HELOC program will not lend on a home listed for sale now or in the last 60 days.
Draw At Closing
At least one HELOC program disburses at least 75% of the line at closing and has no prepayment penalty.
FHA Allows It Too
FHA accepts collateralized loans secured by real estate other than the home being purchased, when an independent third party provides the funds.
Hear From Homeowners Like You
Frequently Asked Questions
Straight answers about using home equity to buy.
Yes. Fannie Mae accepts funds borrowed against an asset, including real estate, for the down payment, closing costs, and reserves.
On at least one HELOC program, yes. It lends against primary residences, second homes, and investment properties.
On Fannie Mae, the payment on the secured loan is counted as a debt when you qualify.
Not on at least one HELOC program, which excludes homes listed for sale now or in the last 60 days.
At least one HELOC program we offer requires a 600 minimum score on a primary residence, and 700 for lines over $500,000.
At least one HELOC program offers $5,000 to $750,000, with lines above $500,000 for primary residences only and a 700 minimum score.
No. Fannie Mae requires evidence that the party providing the secured loan is not a party to the sale.
Find out what you qualify for
Tell us about the home you own and the one you want to buy, and we will show you how your equity can help.
Get Pre-Qualified- Consumer Financial Protection Bureau, home equity loan compared with a HELOC
- Consumer Financial Protection Bureau, mortgages
Loan amounts, rates, terms, and eligibility are subject to credit approval, asset and income verification, appraisal, and program guidelines. Draw requirements and variable rate terms apply. Program availability varies by state. Not all applicants will qualify. Saxton Mortgage, LLC is an Equal Housing Lender.