The Quick Read: This product is a revolving home-equity line recorded in second position, where your existing mortgage stays in place and typically 12 to 24 months of bank deposits stand in for tax returns, while credit score, combined loan-to-value, title, property type and occupancy are still tested against program limits. The statements change how income is documented. They do not change anything else about the review.
- On an investment property, the network ceiling is 70% combined loan-to-value (CLTV), with a 700 minimum credit score and a maximum line of $500,000.
- On a primary residence or second home, the ceiling reaches 90% CLTV, and only at a 720-or-better credit profile.
- Title must sit with an individual or a revocable living trust. An LLC cannot hold title on this line.
- The first mortgage balance comes off the top before any line is sized.
- A property already deeded to an LLC usually points toward a DSCR cash-out refinance instead.
What Is a Bank Statement HELOC Behind a First Lien?
A home equity line of credit (HELOC) lets you borrow, repay and borrow again against your home’s equity. “Behind a first lien” means the line typically sits in second position. Your original mortgage keeps its place, its balance and its terms.
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 “bank statement” label only describes income documentation. A self-employed investor often shows low taxable income after deductions and depreciation. A lender that reads only tax returns sees a weak borrower. A bank statement program reads the deposits instead.
Across Lendmire’s wholesale network, the line is a standalone product that can sit in first or second lien position. Behind a first lien is the version most borrowers want, because it leaves a low-cost existing mortgage alone. Lendmire is a mortgage broker, not a lender, so it places the file with a wholesale partner whose program fits the scenario.
Availability is narrower than the DSCR footprint. The HELOC programs run in Lendmire’s 16 full-service states, while DSCR investor loans cover 41 markets, including Washington, D.C.
Key Terms Defined
Second lien. A loan recorded behind the first mortgage. If the property is sold or foreclosed, the first lender is paid first.
Combined loan-to-value (CLTV). The first mortgage balance plus the new line, divided by the property value. It is the single number that decides how much room you have.
Lien position. Where a loan stands in line for repayment. First is ahead of second.
Expense factor. A percentage a lender subtracts from business deposits to estimate what is left after running costs. Programs set their own factors.
Debt-to-income ratio (DTI). Your monthly debts divided by your monthly qualifying income. Bank statement programs still test it.
Draw period. The stretch when you can borrow against the line, usually paying interest only. Repayment follows and includes principal.
How Much Leverage Does Each Occupancy Allow?
The ceiling depends on how the property is used, so never quote one number for all three. On an investment property, the network tops out at 70% CLTV. On a primary residence or second home, it reaches 90% CLTV, and 90% exists only at a 720-or-better profile.
| Credit tier | Primary residence | Second home | Investment |
|---|---|---|---|
| 720+ | 90% to $500K; 75% to $750K | 90% to $500K | 70% to $500K |
| 700-719 | 85% to $500K; 75% to $750K | 85% to $500K | 70% to $500K |
| 680-699 | 85% to $500K | 85% to $500K | Not eligible |
| 660-679 | 85% to $500K | 80% to $500K | Not eligible |
| 640-659 | 80% to $500K | 75% to $500K | Not eligible |
| 620-639 | 70% to $400K | Not eligible | Not eligible |
| 600-619 | 60% to $400K | Not eligible | Not eligible |
These are typical ranges from select wholesale lenders, and every file is reviewed individually. They are not a commitment to lend.
NerdWallet reports that a HELOC on an investment property typically needs at least 20% equity across the broader market. The network is stricter on an investment property. It caps at 70% CLTV, so you keep at least 30% equity after the line.
The Requirements Checklist
Think of the review as six tests. Bank statements only touch the first one.
| Item | What the lender looks for | Why it matters |
|---|---|---|
| Income | 12-24 months of deposits, personal or business | Replaces tax returns |
| Credit | 600 floor; 700 on investment | Sets CLTV tier |
| CLTV | First balance plus line, within tier cap | Sizes the line |
| DTI | 50% max; 45% at 600-679 | Tests repayment |
| Title | Individual or revocable trust | LLC cannot hold title |
| Property | 1-4 units, PUD, townhome, condo | Some types not eligible |
Credit is read from a single-bureau score keyed to the primary wage earner. A bankruptcy needs four years of seasoning from discharge or dismissal. Foreclosure history is handled differently by each wholesale program. One program seasons a foreclosure at seven years and a deed-in-lieu, pre-foreclosure or short sale at four. The other declines that history regardless of age.
How Underwriting Treats the File, Step by Step
Step 1: Lien position is chosen on purpose. A second-lien line leaves your mortgage alone. A first-lien line is the only loan on the property, so any existing mortgage is paid off at closing. Some first-mortgage holders will not write a line on a rental at all, so the lender you pick matters.
Step 2: The line is sized. The standard formula is value times the maximum CLTV, minus the first mortgage balance. The CFPB’s HELOC booklet describes the same logic. It says lenders set the credit limit as a percentage of appraised value, less what you owe, and that they weigh your ability to repay and your credit history.
Here is the math in percentages. Say a rental’s value is 100%, and the first mortgage balance is 50% of value. The investment ceiling is 70% CLTV. The most room the line can use is 20% of value, and the lender can size it lower. If the first balance is already near 70%, nothing is left to lend.
Step 3: Deposits become income. The underwriter averages qualifying deposits over 12 or 24 months of statements. Most programs strip out several kinds of deposits:
- Transfers between your own accounts.
- One-time or unusual deposits, such as a loan or a large asset sale.
- Anything that cannot be tied to the business or to your regular income.
Business statements often get an expense factor applied, because gross deposits are not take-home income. Personal statements usually do not. The result is a qualifying income figure that feeds the DTI test. You can often choose which account type to submit, and the choice can move the number noticeably. Keeping business and personal money in separate accounts makes the review cleaner.
Step 4: The first mortgage enters the DTI. The existing first mortgage payment counts in your monthly debts. The new line is qualified on the interest-only payment calculated on the maximum draw, even if you plan to draw less. DTI tops out at 50%. It tops out at 45% for credit profiles from 600 to 679, and anything above 45% requires a 680 minimum.
Step 5: Credit, valuation and title. Lines at or below $500,000 ordinarily use an automated valuation, though a higher CLTV may require a second valuation. You can request a full appraisal in any case. Every line above $500,000 requires one.
Step 6: Draws and servicing after closing. At least 75% of the line is drawn at closing. Pricing floats during both the draw and repayment periods and does not convert to a fixed structure. A minimum subsequent draw of $1,000 applies on the program that states one.
Structures and Variations
Two draw structures exist on primary residences and second homes:
- A 3-year interest-only draw followed by a 17-year fully amortizing repayment.
- A 5-year interest-only draw followed by a 25-year fully amortizing repayment.
Investment lines run the 5-year draw and 25-year repayment structure only. A quoted figure should always be read together with its own program’s draw and repayment structure.
Line sizes run from $25,000 to $750,000. A line above $500,000 is primary residence only. It requires a credit profile of 700 or better (720 on the program with the longer interest-only runway), caps at 75% CLTV, and needs a full appraisal.
Lendmire works with two wholesale HELOC programs, and their details differ. This article calls them the higher-leverage program and the longer-runway program, which is the one built around the 5-year draw. The longer-runway program is stricter on credit history. It wants two tradelines seasoned 12 months, or one seasoned 24. It also asks for a clean housing history, and it allows modular factory-built homes. Exposure limits differ too. A borrower may hold three lines in total, and combined exposure caps at $2,000,000 on one program and $750,000 on the other. A borrower with more than 15 financed properties is not eligible.
Property types are broad. Single-family, 2-4 unit, PUD, townhome and condominium properties qualify, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use and agricultural-zoned properties are not eligible on either program. Two- to four-unit properties carry a 640 minimum on the longer-runway program. Sub-640 profiles are limited to single-family residences with a clean 12-month housing history on that same program, and because second homes floor at 640 and investment at 700, that limit reaches primary residences only.
Where the General Rule Breaks
LLC-titled rentals. This is the sharpest break point. Title must be held by the individual borrower or a revocable living trust. LLCs, corporations, partnerships and irrevocable, blind or land trusts cannot hold title. A few lenders in the broader market do allow LLC title, as one BiggerPockets discussion notes, but it is not an option on this network. A property already deeded to an LLC needs a vesting change or a DSCR cash-out refinance instead.
A thin lender pool. NerdWallet notes that investment-property lines bring a smaller lender pool, less borrowing power and strict requirements, because lenders see higher default risk. That matches what a broker sees across wholesale guidelines. Fewer lenders write the product, and each one writes it narrowly. A broker that shops several wholesale lenders can match the file to the program that fits.
A large first balance. If the first lien already consumes most of the allowed CLTV, there is nothing left to size. A low-rate first mortgage is valuable, but it does not add room to the line.
Sub-700 investors. Investment lines floor at a 700 credit profile. A borrower at 680 may qualify on a second home or primary residence but not on a rental.
Listed properties. A property listed for sale, or listed within the past 60 days, is ineligible in several states.
Freeze risk. The line is not guaranteed once it is open. The CFPB’s official comment on home equity plans covers dwellings generally, not only principal residences. It also says a significant decline in value can allow a lender to freeze or cut a line, and no appraisal is required first. Balances you already drew stay owed.
Bank Statement HELOC vs the Alternatives
The honest comparison is four products. Each answers a different problem.
| Factor | Bank statement HELOC | Traditional HELOC | DSCR cash-out refi | Closed-end second |
|---|---|---|---|---|
| Income basis | Deposits, 12-24 months | Tax returns, W-2s | Property rent vs payment | Varies |
| Lien | First or second | Usually second | New first lien | Second |
| Draws | Revolving | Revolving | One lump sum | One lump sum |
| Leverage | 70% CLTV investment | Varies | About 75% on standard rentals | Varies |
| Title | Individual or trust | Often individual | LLC allowed per program | Varies |
A DSCR cash-out refinance tops out around 75% loan-to-value on standard rentals and 70% on short-term rentals. About six months of seasoning is the common expectation. Subject to lender program eligibility, an LLC can hold title.
First Lien, Second Lien or DSCR Cash-Out?
The right choice depends on what you are trying to protect and how the rental is held.
Choose a second-lien line when your first mortgage is cheap, you want to keep it, and you need flexible draws for a down payment or a rehab. You also need title in your own name or a revocable trust, a 700-plus score, and enough room under 70% CLTV.
Choose a first-lien line when you want a single loan and are fine replacing the current mortgage.
Choose a DSCR cash-out refinance when the property sits in an LLC, your personal income documents poorly, or you want the property’s rent to carry the review. 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 underwriting basis flips. The bank statement line is reviewed on your income, your credit and your CLTV. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. For how that works in full, see Lendmire’s complete DSCR loans guide. Coverage of 1.00 is where select programs start. A separate select-lender path goes below 1.00 with leverage and terms adjusted.
Clearing 1.00 does not mean positive cash flow. Coverage compares rent to the mortgage payment, taxes, insurance and dues. Repairs, vacancy, management and utilities sit outside it.
Many self-employed investors with heavy depreciation fit the bank statement line, as a BiggerPockets discussion of a bank-statement investor with negative adjusted gross income illustrates.
What Slows or Sinks a File
These are the points where a file runs into program limits:
- Credit below the occupancy floor. Investment starts at 700. Second homes start at 640.
- Too little equity. The first balance plus the line exceeds the CLTV tier.
- Wrong title. An LLC or irrevocable trust holds the deed.
- DTI above the cap. Above 45% needs a 680 minimum, and 50% is the ceiling.
- Messy deposits. Large transfers, one-time inflows and commingled accounts shrink the qualifying figure.
- Ineligible property. Manufactured homes, co-ops, condotels, log homes and mixed-use properties are not offered.
- Derogatory history inside the seasoning window. Bankruptcy needs four years, and foreclosure history splits between programs.
Fixes follow the problem. Retitle, wait out seasoning, pay down a card or choose a smaller line. Picking the best program for your situation depends on which of these tests you are closest to failing.
What to Gather Before You Apply
- The last 12 or 24 months of personal or business statements, all pages.
- A current mortgage statement for the first lien.
- A deed or title report showing how the property is vested.
- Your credit profile and a list of all financed properties.
- A short explanation for any large or unusual deposits.
Frequently Asked Questions
Does my first mortgage stay in place?
Yes, when the line typically sits in second position. The first mortgage keeps its balance, term and payment. Only a first-lien line replaces it, and in that case the old loan is paid off at closing.
Which statements can I use, personal or business?
Many programs accept either, and each treats them differently. Business deposits usually carry an expense factor. Personal deposits are averaged after non-income items are removed. The right choice depends on where your income actually lands, and a broker can compare how each wholesale lender handles it.
Can I get one on a rental held in an LLC?
Not on this network. Title must be held by an individual or a revocable living trust. A vesting change or a DSCR cash-out refinance is the usual route, with LLC titling subject to program terms.
How much can I borrow on an investment property?
Investment lines run up to $500,000 at a maximum 70% CLTV, with a 700 minimum credit profile. The first mortgage balance comes out of that room. Every figure is subject to lender guidelines and full file review.
Is the interest tax-deductible?
It can depend on how the funds are used and how the property is held. Tax treatment can vary, so keep clear records and speak with a qualified tax professional before relying on any deduction.
Next Step
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.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage that arranges home equity lines of credit through wholesale lending partners in its 16 full-service states. Lines on primary residences, second homes and investment properties are each reviewed individually by the lender under the program’s occupancy, credit and combined-loan-to-value 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. NerdWallet, Can you get a HELOC on an investment property
3. BiggerPockets, HELOCs for investment property
4. CFPB, Home Equity Plans official comment
5. BiggerPockets, second lien HELOC question
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 a Bank Statement HELOC Works After Delisting and Keep a Low First Mortgage · How a Bank Statement HELOC Works for Landlords Declined by Their Bank · How a Bank Statement HELOC Works Behind an Existing VA Loan
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.