The Quick Read: You qualify when two separate reviews both pass: one on your deposit-based income, credit and equity, and one on the building and the unit you own, which must be residential collateral rather than commercial or mixed-use property.
- A retail or office floor in the tower does not automatically disqualify a residential unit, but the lender still reviews how the project is built and used.
- Commercial units, mixed-use property and condotels are not offered on this network’s equity lines.
- Occupancy sets the leverage ceiling: investment lines top out at 70% CLTV, while primary residences and second homes can reach 90% CLTV only at a 720-or-better credit profile.
- Title must sit with you personally or in a revocable living trust, because an LLC cannot hold title on these lines.
- Strong deposits cannot rescue a building that fails project review.
What a Bank Statement HELOC Is (and Isn’t)
A bank statement HELOC is a home equity line of credit where income is proven with deposits instead of tax returns. HELOC stands for home equity line of credit. It works like a credit line secured by the property, and you borrow against it as needed.
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.
The product is useful when your returns understate your cash flow. Self-employed owners with heavy deductions often show more income in their deposits than on paper. The loan still reviews credit, debt load, equity and the property. It uses different documents, not fewer standards. Under this approach, the file is reviewed on documented income under the applicable program, subject to lender guidelines.
Most big retail lenders do not write these lines on rentals. Lendmire is a mortgage broker, not a lender. It places files with select wholesale partners and matches the scenario to the program whose rules fit it. The best program for your situation depends on occupancy, credit profile, leverage needed and the building itself. This line type is also available only in Lendmire’s 16 full-service states, which is narrower than the 41-market DSCR footprint.
The Two Reviews: You and the Building
Every file on a condo gets two parallel reviews. The borrower review looks at income, credit, debt and equity. The property review looks at the unit, the project and the title. A strong result on one cannot rescue a failure on the other.
| Review | What the lender checks | Common snag |
|---|---|---|
| Borrower | Deposits, credit, DTI, CLTV | Low credit, high debt ratio |
| Property | Unit type, project, zoning | Commercial or hotel-style use |
| Title | Who holds ownership | Property deeded to an LLC |
| Valuation | Automated value or appraisal | Value short of required equity |
DTI means debt-to-income ratio, which compares your monthly debts to your monthly income. CLTV means combined loan-to-value, which adds the new line to your first mortgage and divides by the property’s value.
Why a Commercial Floor Matters in a High-Rise
A commercial floor matters because lenders ask what the collateral actually is. A residential unit in a tower with ground-floor retail is one case. A commercial unit or a whole mixed-use building is another. The first can be eligible. The second is not offered on this network’s lines.
Think of the tower as the container and your unit as the collateral. The lender is not financing the shops. It is lending against your residential unit, and the commercial floor shapes the project review that follows. Lenders look at how the building is described in its declaration and zoning. They also look at whether the commercial use fits a primarily residential building.
A live-work unit is a gray area. It depends on zoning and how the space is used. A unit zoned commercial or mixed-use is not offered. A unit zoned residential with a home office is a different story, and the lender decides after reading the documents.
The network also does not offer lines on condotels, which are condo units operated like hotel rooms. A tower with a hotel-operated floor raises the same concern for a different reason, and the lender will want to see how that floor is used.
How Commercial Share Is Counted
Commercial share is the portion of a building’s total floor area that is non-residential. The percentage you hear most often comes from the agency world. Fannie Mae’s Selling Guide caps commercial or mixed-use space at 35% of a project or building. That cap includes space above and below grade. The calculation divides non-residential square footage by total square footage. It counts commercial space even when the residential and commercial owners belong to separate associations.
That cap is a market reference, not the rule for this network. The network accepts condominiums including non-warrantable ones, and a non-warrantable condo is one that fails agency project standards. That label is a financing category, not a verdict on the building. Each wholesale lender still reviews the project, subject to its own guidelines, and no single percentage applies across all of them.
A mortgage insurer’s education page, Enact, lists mixed-use or excessive commercial space, generally above 35%, among the triggers for a non-warrantable condo. Other agency programs measure commercial space differently, so 35% is a program rule rather than a universal one. According to National Condo Inspections, a secondary industry explainer, most mixed-use residential buildings carry a commercial share in the single digits or low teens.
Here is how the count can shift. These are modeled assumptions, not market data. Picture a tower with 500,000 total square feet.
| Counting method | Commercial sq ft | Share |
|---|---|---|
| Retail plus office only | 60,000 | 12% |
| Add leased commercial parking | 90,000 | 18% |
| Add a hotel-operated floor | 140,000 | 28% |
The tower never changed. Only the definition of commercial did. Ask the management office which spaces are treated as commercial and how the association reports them. Whether a parking level counts depends on who operates it and how it is used.
Unit vs. Building: What Is Eligible Collateral
The cleanest way to avoid confusion is to sort by what you own.
| What you own | Eligible on these lines? |
|---|---|
| Residential condo unit in a tower | Yes, subject to project review |
| Non-warrantable residential condo | Yes, subject to lender guidelines |
| Live-work unit | Depends on zoning and use |
| Commercial unit (shop, office) | Not offered |
| Whole mixed-use building | Not offered |
| Condotel unit | Not offered |
| Co-op share | Not offered |
Single-family homes, 2-4 unit properties, townhomes and PUDs are also eligible. Manufactured homes, log homes and agriculturally zoned property are not.
A common mix-up is treating the two situations as the same. Owning your unit in a tower with a shop downstairs does not make your collateral mixed-use property. Owning the shop does. Searchers sometimes land on whole-building commercial loans when they only need a loan on their own unit. Those loans solve a different problem.
The Other Building Checks
A commercial floor is only one item on the project review. Lenders typically look at several others, and any one of them can create a snag.
| Check | What the lender wants to see | Common snag |
|---|---|---|
| Litigation | No major pending suits against the association | Construction defect claims |
| Reserves and budget | A funded reserve and a workable budget | Underfunded reserves |
| Insurance | Master policy in force and adequate | Gaps in coverage |
| Dues | Few units delinquent on assessments | High delinquency rate |
| Ownership mix | Reasonable investor share | Many units held by one owner |
None of these is a Lendmire-set percentage. Thresholds differ by lender, and the strictness of each depends on the loan size and leverage. Non-warrantable status can also change. If an association cures the failing item, a lender can review the project again and reclassify it.
Your Side: Deposit-Based Income, Documents and Title
Your income file is built from deposits. Lenders typically ask for 12 or 24 months of personal or business statements, and the program sets which. A profit-and-loss statement or a CPA letter can help in some cases. If you use business deposits, expect to provide a business license or entity documents. You will also need a current statement on your first mortgage, since the line sits behind it or beside it and its balance and payment both count.
Credit, debt and equity are the next pieces. These are the ranges that apply on this network, subject to lender guidelines and full file review.
| Occupancy | Credit and leverage | Line size |
|---|---|---|
| Investment property | 70% CLTV at 700+; minimum score 700 | Up to $500,000 |
| Second home | 90% CLTV at 720+; 85% at 700+; minimum 640 | Up to $500,000 |
| Primary residence | 90% CLTV at 720+; 85% at 700+; minimum 600 | Up to $500,000 at those tiers |
Leverage drops as credit drops, so those top figures are not available to everyone. A higher score does not lift an investment line past 70%, because the 700 and 720 tiers reach the same ceiling there.
Debt ratio is capped at 50%. It drops to 45% for credit profiles from 600 to 679, and a ratio above 45% requires a 680 minimum. The lender reviews your file on the interest-only payment calculated on the maximum draw, not on what you plan to borrow. Credit reports must be no more than 90 days old at closing, and the score model keys to the primary wage earner.
The structure matters on an investment line. It runs a 5-year interest-only draw followed by a 25-year repayment. At least 75% of the line is drawn at closing. Plan around that, because it is not a purely open-ended credit line.
Valuation is usually automated on lines at or below $500,000. A full appraisal is required on any line above that amount, and you can request one in any case. Lines above $500,000 are primary-residence only.
Title is the sharpest filter for investors. The property must be held by you individually or in a revocable living trust. LLCs, corporations, partnerships and irrevocable, blind or land trusts cannot hold title. If your unit is already deeded to an LLC, you would need a vesting change or a different product.
How to Get the Building Paperwork
You can do most of the building homework before you apply. Work through these steps in order.
1. Request the condo questionnaire from the management office.
2. Ask for the current budget and the reserve study.
3. Pull the declaration and the master insurance certificate.
4. Ask how the association classifies each commercial space.
5. Confirm zoning if you own a live-work unit.
6. Confirm your own title and vesting.
Start with the items that depend on other people, such as the management office and the association’s records. Items you control, like bank statements and your own title documents, can wait until you have the building answers. If you find a problem, you will know before spending effort on the income file.
If the Building Fails: Your Options
A failed project review does not end the search. It changes which product fits.
| Situation | Option to compare |
|---|---|
| Building is non-warrantable but residential | Lender that reviews non-warrantable condos |
| Unit held in an LLC | Vesting change, or a DSCR cash-out |
| Commercial or mixed-use collateral | Commercial financing, not an equity line |
| Condotel unit | A different product, since these are not offered |
| Income hard to document with deposits | A DSCR loan that reviews the property’s rent |
The DSCR route deserves a closer look. A bank statement HELOC reviews your credit and debt load, not the property’s rent. A DSCR loan flips that. DSCR means debt service coverage ratio, which compares a rental’s income to its full monthly payment of principal, interest, taxes, insurance and any HOA dues. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines, and an LLC can hold title depending on program guidelines.
A DSCR cash-out refinance tops out around 75% LTV across most of the network, and about six months of ownership is the common expectation. A 1.00 coverage ratio is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Clearing the ratio is not the same as positive cash flow, because repairs, vacancy, management and utilities sit outside the calculation. The complete DSCR loans guide covers how those files work. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
A cash-out refinance also replaces your first mortgage, while a HELOC leaves it in place. If you hold a low-cost first mortgage, that tradeoff matters.
Key Terms Defined
CLTV: Combined loan-to-value, which adds the new line to your first mortgage and divides by the property’s value.
Non-warrantable condo: A condo project that fails agency standards, such as those on commercial share, litigation or reserves. It is a financing category, not a judgment on the building.
Mixed-use collateral: A property or unit whose use or zoning is partly or wholly commercial, which is not offered on these lines.
Condotel: A condo unit operated like a hotel room, which is not offered on these lines.
Revocable living trust: A trust you can change or cancel that can hold title on these lines, unlike an LLC.
Lien position: Whether the line sits first or second behind your existing mortgage. Either is possible, but the first mortgage must allow a junior lien.
Where Federal Rules End and Lender Rules Begin
Many borrowers assume a federal rule created this product. It did not. Bank statement HELOC is an industry label. The CFPB’s compliance guide on the ability-to-repay rule says HELOCs are among the loans that rule does not cover. The same guide says a loan cannot be structured as open-end credit to evade the rule. In practice, the lender’s and investor’s guidelines set the underwriting standards, which is why they vary so much from one lender to another.
For you, that means you cannot lean on a federal definition to know what a lender will do. You compare guidelines. Investors on forums describe the same friction. In a BiggerPockets thread on a rental condo, smaller lenders often decline condos and non-primary properties, which is anecdotal but consistent with how narrow this market is.
Frequently Asked Questions
Does a ground-floor shop make my tower commercial?
Not for the collateral. Your residential unit stays residential, even if the building has retail below. The lender reviews the project, including how commercial space is described and used. The exclusion applies when you own commercial or mixed-use collateral, such as the shop itself or a unit zoned that way.
Is there a commercial-space percentage that disqualifies the building?
The 35% figure belongs to Fannie Mae’s guide, not to this network. Wholesale lenders on this network review non-warrantable condos under their own guidelines and do not apply one universal percentage. Ask for the project’s commercial share early, then let the lender tell you how it counts it.
How much can I borrow on a rental unit in a tower?
On an investment property the ceiling is 70% CLTV, with a 700 minimum credit score and a line up to $500,000. CLTV counts your first mortgage, so the new line is what remains after that balance is subtracted. Every figure is subject to lender guidelines and full file review.
Can my LLC hold the unit?
No. These lines require title in your name or in a revocable living trust. If the unit is in an LLC, you would need a vesting change or a different product, such as a DSCR cash-out, subject to program terms.
Do I still need good credit if my deposits are strong?
Yes. Deposits replace tax returns as proof of income, but credit, debt ratio, equity and property review all still apply. Strong deposits cannot offset a credit score below the program floor or a building that fails review.
Next Steps
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. Call 828-256-2183 or request a quote.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker. Home equity lines of credit — on a primary residence, a second home or an investment property — are arranged through wholesale lenders in Lendmire’s 16 full-service states, and every line is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Investors who want the broader program framework can review how DSCR loans work.
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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. Fannie Mae Selling Guide B4-2.1-03
2. Enact: What makes a condominium non-warrantable
3. National Condo Inspections: commercial space ratio
4. CFPB ATR/QM small entity compliance guide
5. BiggerPockets: HELOC on a rental condo
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a Bank Statement HELOC From a Lender You Can Trust on Fees and Terms · How to Qualify for a Bank Statement HELOC Lender for an LLC-Owned Rental · How to Qualify for a Bank Statement HELOC for Short-Term and Long-Term Use
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.