# Are there any limitations on borrowing for a down payment?

> Borrowing for a down payment adds complexity and triggers closer scrutiny! Regulatory bodies view non-traditional sources (like borrowed funds) as riskier.

Category: Financing
Last verified: 2026-02-18
Source: https://ratellow.com/faqs/financing/are-there-any-limitations-on-borrowing-for-a-down-payment

## Answer
Borrowing for a down payment adds complexity and triggers closer scrutiny! Regulatory bodies view non-traditional sources (like borrowed funds) as riskier. While possible, borrowing a down payment demands a strong credit history. Consider Emily, using a line of credit. The lender will intensely review her credit, debt ratios, and financial stability. The down payment must be an arm's length transaction, completely separate from the property's purchase/sale, not tied via unsecured loans/lines of credit.

## Institutional highlights
- If you borrow your down payment, lenders will look closely at your ability to repay it.
- Your down payment can't come from a source directly tied to the home purchase, like the seller.
- If you aren't a permanent resident, or are buying a mobile home, you likely won't qualify for CMHC insurance.

## Related guide
- https://ratellow.com/guides/borrowed-down-payment

## Sources
- Property value used for the LTV ratio — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017
- Page 3 — https://assets.cmhc-schl.gc.ca/sf/project/cmhc/pdfs/factsheets/new/cmhc-quick-reference.pdf#page=3
- I. Purpose and scope of the guideline — https://www.osfi-bsif.gc.ca/en/guidance/guidance-library/residential-mortgage-underwriting-practices-procedures-guideline-2017#1.0