Would you risk your retirement fund for a jumbo home loan?

When you get a home loan, you’re betting your house that you can pay the mortgage. Would you bet your retirement, too? A loan program, blamed in part for the housing crash, is making a comeback.

When the housing market was flying high toward the end of last decade, 100 percent financing, also known as “no money down,” was easy to get. Then, the housing bubble burst, borrowers found themselves underwater and millions of Americans lost their homes.

More than five years later, housing is starting to recover and no money down loans are back, with a twist, targeting wealthy home buyers.

“These are people who are buying really expensive, big million dollar type homes,” said Seattle real estate educator and consultant Jillayne Schlicke. She explained that these jumbo loans are linked to a borrower’s retirement account.

“When you’re looking at a million dollar home, maybe they might have to sell stock in order to get the down payment, so, instead of selling the stock, the idea is keep the asset and save money on taxes and we, the lender, would put a lien against your assets for the down payment.”

Here’s an example of how such a loan might work. Most of the loan is backed by the house but up to 40-percent of the home’s value could be secured by a retirement account. There are restrictions. Retirement funds are typically not available to borrow while the funds are backing a home loan. But the retirement funds remain in place, earning returns as normal. Oftentimes, the investment account must be with the same financial institution that’s providing the home loan.

It might seem like a low risk for somebody who is rich. But even rich people make bad decisions.

“Sometimes people with a lot of assets think they’re really smart but they also got wowed into signing on for some of those toxic loan programs during the real estate bubble, as well,” said Schlicke.

These loans, linked to retirement accounts, protect the lender and increase the risk to the homeowner. Schlicke says the no money down loan could cost a borrower his house and take a chunk of his retirement portfolio, too.

“If you do not make your mortgage payment, the lender can take back the home, of course we call that foreclosure. But what happens if you don’t make the payment and you have your assets collateralized? Could your assets then be taken? Well, I don’t know,” she conceded.

So talk to somebody who does know.

“Get a copy of the deed of trust and read it and if you don’t understand it, take it to an attorney,” advised Schlicke. “You’re one of the one percent, for crying out loud, don’t tell me you can’t afford to have an attorney look at these documents in front of you and give you advise on what it is you’re signing.”

Of course, low down payment and no money down loans are still available to some typical homebuyers through Veterans Affairs, Navy Federal Credit Union and other programs, without risk to retirement funds.

State regulators have no specific complaints or concerns about the no money down jumbo loans except to remind borrowers that not enough people anticipated the housing crash and the financial meltdown that plunged the country into recession and forced millions of Americans into foreclosure.