The Quick Read: The longest draw is not a single program you pick off a shelf. It is a contract term that shifts with the lender, the lien position, and how the property is occupied, so the best program for your situation is the one whose draw, repayment, leverage, and title rules all fit the property. Across the wholesale network Lendmire works with, an investment-property line has one structure: a 5-year interest-only draw, then a 25-year fully amortizing repayment. There is no longer draw option on investment collateral, subject to lender guidelines.
- Investment lines in the network cap at 70% CLTV, with a 700 minimum credit score and a maximum line of $500,000.
- At least 75% of the line is drawn at closing, and pricing floats through both the draw and repayment periods.
- Title must sit with an individual or a revocable living trust. An LLC cannot hold title on these lines.
- A longer draw delays principal paydown. It does not raise leverage or loosen eligibility.
- When the line does not fit, a DSCR cash-out refinance is the usual alternative.
Why “Longest Draw” Is the Wrong First Question
Draw length is one variable on a file, and it trades against the others. A long interest-only window sounds good. But it leaves the full balance outstanding when repayment starts, and the payment then steps up.
How large a line the equity supports.
An equity line is sized by combined loan-to-value, occupancy, and credit — not by rental coverage. Switch the occupancy or the credit band and the ceiling moves with it.
Investment-property lines require a 700 minimum credit score; second-home lines start at a 640 minimum and primary-residence lines at 600, and the combined-LTV ceiling steps down as the credit band drops on primary-residence and second-home lines and holds on investment-property lines; the line cap steps down on primary-residence lines and holds at every tier on investment-property and second-home lines.
A debt-to-income ratio above 45% requires 680+ credit. Profiles under 640 are limited to single-family homes. At least 75% of the approved line is drawn at closing. Ceilings, floors, and caps update from Lendmire’s centralized guideline source.
Line estimate
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. The rate is an editable assumption; equity-line pricing is variable through both the draw and repayment periods and never converts to fixed. Occupancy and credit drive the ceiling together: an investment property tops out at 70% combined LTV (minimum credit 700, line cap $500,000); a second home tops out at 90% combined LTV (minimum credit 640, line cap $500,000), with the ceiling stepping down as the credit band drops (the cap holds at every tier); a primary residence tops out at 90% combined LTV (minimum credit 600), and its $750,000 maximum line is available only at 75% combined LTV or below with a 700-or-better credit profile (720 on the longer-runway program) and a full appraisal. Lines above $500,000 require a full appraisal. Credit, debt-to-income, property type, and full underwriting review all affect the final line.
Most “longest draw” talk online comes from owner-occupied products. Investment collateral sits in a tighter box. Fewer lenders write it, the leverage is lower, and the title rules are stricter. A broker who shops many wholesale lenders sees this daily. The draw length is rarely what decides whether a file works. Leverage, credit, and vesting usually do.
Experian’s explainer says investment-property lines are offered by fewer lenders, and that those lenders weigh DTI, equity, and cash reserves. Market surveys there describe a typical 10-year draw on rentals with 10 to 20 years of repayment. That is a market-wide pattern. On Lendmire’s network, an investment line runs 5 years of draw and 25 years of repayment.
So the honest answer to the title is this. If you want the longest draw anywhere in the market, you are shopping outside this network, and you should price in the trade-offs below. If you want a clean, predictable investment line, the 5/25 structure is what exists here.
How the Mechanics Work, Step by Step
An equity line moves through several steps. Here is how a file moves through them.
1. Collateral and title. The property must be held by the individual borrower or a revocable living trust. Fee simple and leasehold both work. If the property is deeded to an LLC, the owner needs a vesting change first, or a DSCR cash-out instead.
2. Underwriting reads the borrower. This is the biggest difference from a DSCR loan. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. An equity line reads credit, DTI, and equity. The maximum DTI is 50%, and 45% for credit profiles from 600 to 679. A ratio above 45% needs a 680 score. On an investment line the score floor is already 700, so those lower tiers do not apply.
3. The payment is tested on the maximum draw. The DTI test uses the interest-only payment calculated on the full line, not on what you drew. A new line can raise your DTI before you borrow a dollar.
4. Valuation. Investment lines cap at $500,000, and full appraisals begin only above $500,000. So an investment line is structurally in the automated-valuation lane and commonly closes with no traditional appraisal. A borrower may still ask for a full appraisal.
5. Draw phase. You borrow, repay, and borrow again within the limit. After closing, the minimum subsequent draw is $1,000 (Texas is $4,000). Payments are interest-only.
6. Repayment phase. Borrowing stops. The balance amortizes with principal and interest over 25 years. The payment steps up, and because pricing floats, it can move again.
The CFPB explains the same two-phase design. Monthly payments are often significantly higher in repayment, and some plans in the wider market require the whole balance at that point. The network’s investment line fully amortizes, so there is no balloon. A balloon structure is something to check for on any line outside it.
Draw Structures by Occupancy
The 5-year draw is the only draw on investment collateral. Primary residences and second homes get a choice.
| Feature | Investment property | Primary / second home |
|---|---|---|
| Draw / repayment | 5-year / 25-year only | 3/17 or 5/25 |
| Max CLTV | 70% | Up to 90% (720+ credit only) |
| Min credit | 700 | 600 floor on the program |
| Max line | $500,000 | $750,000 on a primary |
Leverage ceilings are tied to occupancy. The 90% figure belongs to primary and second-home lines at a 720-or-better profile. It never applies to a rental. Market surveys show higher figures for investment lines, with Experian noting that lenders typically cap investment-property LTV at 80%. That is a market-wide figure. On this network, the investment ceiling is 70% CLTV, with no tier above it.
Two credit tiers exist on an investment line, 720 and 700. Both reach 70% CLTV up to $500,000. A higher score above 700 buys no extra leverage. And 700 is a hard floor with nothing beneath it.
Tennessee shortens the primary-residence draw structures, but that does not touch investment lines.
Why Long Draws Are Rare on Rentals
Lenders treat a rental line as riskier than a line on the home you live in. If a rental sits vacant, the borrower still owes the payment. That pushes lenders toward lower leverage, higher credit floors, and shorter commitments.
A long interest-only window also stretches the lender’s exposure on a floating-price loan. Most wholesale lenders keep the draw modest and the repayment long. Draw length is not where they give ground.
The lenders that write investment lines at all vary by the borrower’s profile and the property. A broker matches the scenario to the program. A bank branch can only offer its own line.
Longer Draw vs. Longer Repayment
A longer draw is not automatically better. Think through the trade.
A long draw keeps the payment low for more years. But no principal is paid during it. When repayment begins, the full outstanding balance starts amortizing. The step-up is larger because the balance is untouched.
A shorter draw with a long repayment gives the balance more years to shrink. Principal is paid sooner and the payment shock is smaller per year of repayment.
Run it on a rental. During the draw, rent covers an interest-only payment with room to spare. When the line flips to amortizing, the payment rises and the same rent covers less. Plan for that flip on day one, not in year five.
The CFPB’s HELOC booklet makes the related point. Interest-only plans mean you pay only the interest, so the balance stays put unless you add principal. Some plans require a little principal, and even that usually does not retire the loan by the end of the draw.
Total line life on the network’s investment structure is 30 years: 5 plus 25. That is long. The draw is the short part.
Match the Draw to Your Strategy
| Strategy | What matters most | Fit with a 5/25 line |
|---|---|---|
| Staged rehab | Access to funds over time | Works if the draw covers the work schedule |
| Vacancy cushion | Reserves on call | Works, but cost accrues once drawn |
| Down payment source | Large draw at closing | At least 75% is drawn at closing |
| Portfolio expansion | Total exposure | Capped at three lines per borrower |
| Long hold, no plan to repay | Low payment for years | Repayment begins after year five |
A few notes on the table. The 75% drawn-at-closing rule makes this a poor fit for an investor who wants a mostly undrawn reserve. If you only want standby access, a line that requires most of it drawn upfront costs you interest from day one.
Where the General Rule Breaks
These are the edge cases that derail investment-line files.
LLC title. This is the sharpest edge. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title on the line. Many investors hold rentals in an entity. Those properties need a vesting change, or a DSCR cash-out refinance instead, subject to program terms on the entity.
Existing DSCR first lien. The line can sit in first or second lien position. If your first mortgage is a DSCR loan, check that its documents allow a second lien before you apply.
Property type. Single-family, 2-4 units, PUD, townhome, and condominium (including non-warrantable) are eligible. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural zoning are not offered.
Listed properties. A property listed for sale, or listed within the past 60 days, is ineligible in Indiana, North Carolina, Pennsylvania, Tennessee, Texas, and Washington.
Portfolio size. A borrower is limited to three lines. A borrower owning more than 15 financed properties is not eligible.
Credit history. A bankruptcy needs 4 years of seasoning from discharge or dismissal. On investment files, a foreclosure follows a 7-year path, and a deed-in-lieu, pre-foreclosure, or short sale follows a 4-year path.
Geography. Lendmire arranges these lines in 16 full-service states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA. That is narrower than its 41-market DSCR footprint.
Draw Length Is a Contract Term, Not a Promise
Read the agreement. Lenders use the words draw period, term, and maturity loosely. The label to look for is the point where borrowing stops and amortization starts.
Renewal or extension options are lender-specific. On the network’s investment line, assume the draw ends at year five and plan around that. Pricing floats the whole way and never converts to fixed. So a long interest-only runway carries more variable-price exposure.
Qualifying: What Lenders Look At
Here is the checklist the network’s lenders work from on an investment line.
- Credit: 700 minimum. The score model is single-bureau and keyed to the primary wage earner. The report can be no more than 90 days old at closing, and there are no rescores.
- Housing history: Standards apply across all financed properties, so a late on another rental counts.
- DTI: 50% maximum, tested on the interest-only payment at the maximum draw.
- Equity: 70% combined loan-to-value cap on the property.
- Documents: Entity paperwork is not needed, since the borrower holds title personally or in a revocable trust. Have the current first-mortgage statement, insurance, and lease evidence ready.
Clean files have the title question settled before they are submitted.
When the Line Does Not Fit: The DSCR Cash-Out Alternative
If the property sits in an LLC, or you need more leverage than 70%, a DSCR cash-out refinance is the usual alternative. It replaces the first mortgage and pulls equity out in one loan. Across most of the network, cash-out tops out around 75% LTV, with about 6 months of seasoning common. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
The key difference is how the file is read. Many select programs start at a 1.00 coverage ratio, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Clearing 1.00 does not mean positive cash flow, because repairs, vacancy, and management sit outside the calculation.
For a full walkthrough of how DSCR files work, see the complete DSCR loans guide.
Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
Draw period: The window when you can borrow, repay, and borrow again against the line.
Repayment period: The stretch after the draw when borrowing stops and the balance amortizes with principal and interest.
CLTV: Combined loan-to-value, which adds the first mortgage and the line together against the property’s value.
Interest-only payment: A payment that covers interest and no principal, so the balance does not fall.
Vesting: How title to the property is held, such as an individual or a revocable living trust.
Automated valuation: A model-based value estimate used in place of a traditional appraisal.
Frequently Asked Questions
What is the longest draw period on an investment property HELOC?
It depends on the lender, and no authoritative ranking exists. Market explainers describe about 10 years as typical on rentals. On Lendmire’s wholesale network, an investment line carries a 5-year draw followed by a 25-year repayment. No longer draw is offered on investment collateral.
Is an investment property HELOC interest-only?
During the draw, yes. The payment covers interest only, so the balance does not shrink unless you pay extra. At the end of the 5-year draw, the line amortizes over 25 years with principal and interest. Pricing floats through both phases.
Can an LLC borrow on an investment HELOC?
No. Title must be held by the individual borrower or a revocable living trust. A property already in an LLC needs a vesting change first, or a DSCR cash-out refinance instead, subject to program terms.
Can the draw period be extended?
Extension terms are lender-specific and set in the agreement. On the network’s investment line, plan on the draw ending at year five. Ask any lender in writing what happens when the draw ends.
How does this compare with a DSCR cash-out refinance?
The line reads the borrower’s credit and DTI and leaves the first mortgage in place. A DSCR cash-out reads property rent and replaces the first mortgage. The line caps at 70% CLTV on an investment property, while cash-out runs up to about 75% LTV across most of the network. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
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. Reach the team at 828-256-2183 or request a quote.
For current guidelines and terms, see Lendmire’s investment-property HELOC programs page.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and real estate investors in its 16 full-service states. Home equity lines of credit are arranged through wholesale lending channels; Lendmire brokers the line and the lender underwrites each application under its occupancy-based guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. Experian – HELOC on investment property
2. CFPB: What Is a Home Equity Line of Credit HELOC
This article is part of Lendmire’s investment property HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a DSCR Lender Counts the Interest-Only Period · How Much a DSCR Loan Lends on a Wilmington Duplex · DSCR Cash-Out Refinance vs HELOC Before the Exit Fee Period Ends
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.