Which Lenders Offer Home Equity Loans on Investment Properties?

The Quick Read: Usually only a narrow set of lenders will lend against a rental, mainly local banks, credit unions, portfolio lenders, and a few wholesale-network programs, and many large lenders skip rentals entirely. Where a home equity line on a rental is available through Lendmire’s wholesale network, it caps at 70% CLTV on an investment property, with a $500,000 maximum line and a 700 minimum credit score. Title must sit with the individual or a revocable living trust, so an LLC-owned rental does not fit.

• Supply is the bottleneck. NerdWallet reports a smaller lender pool and says not all lenders offer these products.
• Two different products hide behind one phrase: a line secured by the rental, or a line on your own home used to fund a rental.
• On the network’s investment lines, 720 and 700 both reach 70% CLTV. Credit above 700 buys eligibility, not extra leverage.
• A DSCR cash-out refinance is the usual alternative when the rental sits in an LLC or the investor wants a larger draw.

What Does “Equity Loan on an Investment Property” Actually Mean?

Two products share the name, and mixing them up is a common source of confusion. Taxstra’s guide separates them cleanly: a line on your primary home used to fund a rental, and a line secured by the rental itself.

The first is widely available because the lender is looking at an owner-occupied home. The second is narrower and usually comes from portfolio lenders, credit unions, and regional banks.

The collateral risk differs too. With a line on your home, the house sits behind the rental’s performance. With a line on the rental, the rental is the collateral and the home stays out of it.

Structure is the second split. A HELOC is a revolving line with a draw period, and NerdWallet notes the draw period is typically ten years before repayment begins. A home equity loan is a lump sum with a fixed term. NerdWallet also says home equity loans on rentals are no more widely available than HELOCs. So the lender hunt is similar either way.

Which Types of Lenders Offer Them?

Four lender types show up in practice, and each has a different strength. The honest answer to “which lenders” is a category answer, because policies change and vary by branch, state, and property type.

Big banks and large retail lenders are the least predictable group. Many do not offer equity lines on rentals at all, and many that offer lines on primary homes exclude non-owner-occupied collateral. The practical order is to ask the servicer on the first mortgage, then banks and credit unions near the property, then brokers who place files across several lenders.

Investors report the same pattern. Underwriting on a rental line tends to run harder than on a primary-home line, with more document requests and more questions. Smaller local credit unions often treat these files more kindly than large banks do.

What the Network Offers on an Investment Line

Lendmire is a broker. It arranges these lines through select wholesale partners and is never the lender. Across the network, the investment-property grid is short, which makes it easy to read.

• Leverage: 70% CLTV on an investment property. There is no tier above it.
• Credit: 700 minimum. Both the 720 and 700 tiers reach 70% CLTV, so there is no tier below 700.
• Line size: up to $500,000 on an investment property. Lines above that are primary-residence only.
• Position: a standalone line in first or second lien position.
• Structure: a 5-year interest-only draw followed by a 25-year fully amortizing repayment. At least 75% of the line is drawn at closing, and pricing floats through both periods without converting to fixed.
• Valuation: because the line caps at $500,000, it sits in the automated-valuation lane and commonly closes without a traditional appraisal. A borrower can still request a full appraisal.
• Property types: single-family, 2-4 units, PUD, townhome, and condominium, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, and mixed-use or agricultural property are not eligible.
• Title: fee simple or leasehold, held by the individual or an inter vivos revocable living trust.
• Limits: a borrower is limited to three lines, and an investor owning more than 15 financed properties is not eligible.
• Availability: the home equity line is offered in 16 full-service states only (AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, WA). That is narrower than the DSCR footprint of 40 states plus Washington, D.C.

These are typical guidelines from select wholesale partners, subject to lender guidelines and full file review. They are not a commitment to lend. The network figure for an investment line is the 700 floor above.

Occupancy changes the grid. Primary-residence and second-home lines reach higher CLTV, but only at a 720-or-better profile, and none of that applies to a rental.

How the Combined Leverage Math Works

Lenders measure combined loan-to-value, or CLTV. They add the first mortgage balance and the new line, then divide by the appraised or estimated value. Rentalrealestate.com shows the same arithmetic in reverse: value times the maximum CLTV, minus the existing balance, equals the maximum line.

Consider an investor with a free-and-clear rental. At 70% CLTV on an investment property, the usable equity is 70% of value, capped at the $500,000 maximum line. Now take a rental that already carries a first mortgage near 50% of value. The line can only fill the gap between 50% and 70% of value, which is 20 points of equity. The calculator on this site can turn those percentages into dollars as an illustrative estimate.

Three details trip files up here. First, the valuation may be automated, so an investor who thinks the property is worth more than the model shows can request a full appraisal. Second, the first-lien servicer must allow a junior lien if the new line sits in second position. Third, the 70% cap applies even when credit is excellent, so a 780 score does not unlock more leverage on a rental.

Which Route Fits Your Situation?

The choice often turns on title, cash need, and whether you want to keep your first mortgage.

A second lien can protect a low-rate first mortgage. A cash-out refinance replaces the first lien and reprices the whole balance at current terms. That tradeoff is the real decision, and it depends on how large the first mortgage is and how much cash you need.

When an LLC Owns the Rental

An LLC-owned rental is the sharpest structural problem. On this network’s equity lines, LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. Many bank and credit union products carry the same restriction.

Re-vesting the property out of the LLC to qualify can disturb liability protection and may trigger a title insurance review or a due-on-sale question on the existing loan. Check with counsel before moving title. The cleaner path for most LLC borrowers is a DSCR cash-out refinance, which can be written to an LLC, subject to lender program eligibility.

The DSCR Cash-Out Alternative

DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. The loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. For a fuller walkthrough, see the complete DSCR loans guide.

Across the wholesale network, a DSCR cash-out refinance on a standard rental tops out around 75% LTV, with about 6 months of seasoning as the common expectation. For short-term rentals, cash-out generally sits at 70%. Loan sizes run up to $3,000,000 on standard programs (smaller balances available through select lenders). Pricing and available terms vary by lender, borrower profile, property type, and full underwriting review. Reserves vary by lender, leverage, loan size, and transaction type, commonly around 6 months of PITIA.

Coverage is the other test. A 1.00 ratio is where many select programs start, not a universal standard. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Stronger ratios open better leverage and pricing.

One caution: DSCR compares rent to PITIA only. Clearing 1.00 does not mean the property produces positive cash flow, because repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.

For investors weighing a line against a refinance on the same property, Lendmire’s piece Home Equity Line Of Credit On Investment Properties covers the structure side by side.

How to Vet Any Lender in Five Questions

Policies shift, so verify before you spend time on an application. Ask these in order.

1. Does the lender lend on non-owner-occupied collateral at all? Many do not. This one question eliminates most of the list.

2. Will it lend to your vesting? Ask whether title must be an individual or trust, or whether an LLC is allowed.

3. What is the maximum combined leverage on a rental? Get the CLTV in writing, including how the value is determined.

4. Does it qualify on personal income or on rent? Lofty notes that some investor lenders offer DSCR-based seconds and lines, but the label varies. Some products with the name still qualify on personal income and DTI.

5. Does it accept your property type and rental history? Short-term rentals are more contested, and some lenders want a track record or documented rent history.

What Documents Files Usually Need

Documentation is where rental equity lines slow down. Taxstra lists leases, rent rolls, and often two years of Schedule E. Expect a deed or title report, a profit-and-loss summary for the rental, and personal financial statements as well.

On the network’s equity lines, the personal side matters. DTI tops out at 50%, drops to 45% for credit profiles from 600 to 679, and is qualified on the interest-only payment calculated on the maximum draw. The credit report must be no more than 90 days old at closing, with no rescores. Clean housing history across all financed properties is part of the review.

Tax recordkeeping belongs in this step too. Tax treatment can depend on how the funds are used and how the property is held; investors should keep clear records and speak with a qualified tax professional before relying on any deduction. Track each draw to the property it funded.

Key Terms Defined

CLTV: combined loan-to-value, which adds the first mortgage and the new line, then divides by property value.

HELOC: a revolving line secured by property, with a draw period followed by repayment.

Home equity loan: a lump sum with a fixed term, secured as a second lien.

Portfolio lender: a lender that keeps loans on its own books and sets its own guidelines.

DSCR: debt service coverage ratio, which compares monthly rent to the full monthly obligation of principal, interest, taxes, insurance, and any HOA dues.

Junior lien: a loan that sits behind the first mortgage in repayment priority.

If you are considering a home equity line and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. Request a quote through Lendmire’s quote page or call 828-256-2183.

Lenders who will lend against a rental are scarce enough that the first call, to the servicer of your existing mortgage, often tells you more than any list.

About Lendmire

As a mortgage broker (NMLS# 2371349), Lendmire helps homeowners and real estate investors in its 16 full-service states open home equity lines of credit arranged through wholesale lenders. Lendmire is never the lender; line amounts, ceilings and terms are set by the lender under its guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. NerdWallet – Can you get a HELOC on an investment property?

2. Taxstra – HELOC on investment property guide

3. Rentalrealestate.com – HELOC guide

4. Lofty – HELOC on investment property