The Quick Read: Usually up to 70% combined loan-to-value on a second lien, meaning the first mortgage you keep plus the new line cannot exceed 70% of the rental’s value, with lines from $50,000 to $500,000, while the LLC stays on title and the line qualifies primarily on property-level rental income covering the payment. A rental with no mortgage can reach higher leverage on a first lien. Every figure below is a ceiling or floor through select programs, never an offer.
- Second lien (you keep the first mortgage): up to 70% CLTV at a 720 credit score or better, on lines up to $500,000.
- First lien (rental with no mortgage): up to 75% LTV at 740 or better, 70% from 700 to 739, on lines up to $500,000.
- Larger first-lien lines: lines above $500,000, up to $1,000,000, carry a 65% LTV ceiling at 720 or better.
- The formula: value times the allowed percentage, minus every lien already on the property, then the dollar cap, then the rent test.
- Title: the LLC can stay on the deed. The members sign as guarantors. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
What Is a DSCR HELOC, and Why Does It Let the LLC Keep Title?
A DSCR HELOC is a home equity line of credit on a rental you own, qualified on the rent instead of your personal income. DSCR stands for debt-service coverage ratio: the rental’s gross monthly rent divided by the qualifying payment on the loan. The lender looks at the property first and the owner second.
Across our wholesale network, this product comes in two shapes. It is a standalone second lien behind the first mortgage you keep. Or it is a standalone first lien on a rental that has no mortgage. A lien is simply a lender’s legal claim on the property.
There is no traditional personal-income documentation, such as W-2s or a debt-to-income ratio. The rent, the lease, the credit report, and the valuation are all documented. That structure is why an LLC can hold title. The members sign as guarantors, and a title holder who is not a borrower signs a non-borrowing owner acknowledgment and the security instrument.
Here is where people get tripped up. There are two different products that both get called an investment property HELOC.
- Rent-qualified DSCR HELOC: underwritten on the property’s rent. The LLC can stay on title, investment property only.
- Personal-income investment HELOC: underwritten on your credit, income, and debts. These programs generally want the property in your own name or a revocable trust. If the property already sits in an LLC, they typically call for a vesting change or a different product.
Lendmire’s piece How to Qualify for an Investment Property HELOC Without Deeding to Personal Name covers the personal-income side.
Traditional banks are a separate story. A BiggerPockets thread on LLC-owned rentals is anecdotal, but it reflects what many investors report: large retail lenders that market home equity lines mostly have no option for a rental held in an LLC. Whether an LLC can borrow is a lender-program question, not a universal rule.
How the Borrowing Limit Is Calculated, Step by Step
Your limit is the smallest number that survives four tests. The formula is simple, and you can run it yourself on any rental.
1. Apply the leverage percentage to value. On a second lien, that is up to 70% CLTV at 720 or better. CLTV means combined loan-to-value: the first mortgage balance plus the new line, divided by the property’s value.
2. Subtract every lien already on the property. The leftover is the most the line could be on leverage alone.
3. Apply the dollar caps. Lines start at $50,000. Second-lien lines top out at $500,000.
4. Run the rent test. The rent must cover a stress payment at 1.10x or better. More on that below.
The lender counts the entire credit limit in the leverage test, whether you draw it or not. A line you plan to use lightly still eats leverage as if fully drawn. The CFPB’s HELOC booklet describes the same basic method: take a percentage of the appraised value, then subtract what you owe on the mortgage. The percentages in that older booklet are illustrations only. The percentages here come from the program itself.
Worked examples in percentages
Run the numbers on a rental whose first mortgage equals 45% of its value, held by an owner with a 740 score. Leverage allows up to 70% combined. That leaves 25 points of value as the most the line could be, before the dollar cap and the rent test.
Now take a rental whose first mortgage equals 62% of value. Only 8 points of value remain. On a modest-priced rental, that sliver can fall below the $50,000 minimum line, and then there is no line at all.
Last, a free-and-clear rental worth well over a million dollars. The percentage might allow more, but the dollar cap stops it first. A second-lien line cannot exceed $500,000. A first-lien line can run to $1,000,000, but lines above $500,000 carry the lower 65% LTV ceiling across the whole line, and only at 720 or better.
Leverage Tiers at a Glance
Lien position and credit score decide the percentage. Here is the full grid, through select programs and subject to underwriting.
| Lien position | Credit score | Max leverage | Line size |
|---|---|---|---|
| Second lien | 720 or better | 70% CLTV | Up to $500,000 |
| Second lien | Below 720 | Not offered | None |
| First lien | 740 or better | 75% LTV | Up to $500,000 |
| First lien | 700 to 739 | 70% LTV | Up to $500,000 |
| First lien | 720 or better | 65% LTV | $500,000 to $1,000,000 |
A few notes on reading it. A first lien exists only on a rental with no mortgage. If you keep a first mortgage, you are looking at the second-lien row, and its floor is 720. A 700 to 719 score with a first mortgage does not reach that tier.
A declining-market flag lowers the ceiling by 5 points. A few locations carry lower ceilings still. Condominiums, including non-warrantable ones, are eligible property types, but the same tier grid governs every property type.
Why the Rent Test Can Shrink Your Line Before Leverage Does
The rent test often becomes the real limit. The program requires a minimum 1.10x DSCR. The qualifying payment is a fully amortizing payment on the entire credit limit, run at a stress level set 2 percentage points above the starting rate. It covers principal and interest only. Taxes and insurance are not part of it.
Because the test uses the full line, a bigger line means a bigger stress payment, and the rent has to carry it. A rental with plenty of equity but thin rent can support a smaller line than the equity alone suggests.
The rent figure has its own rule. Rent is the lesser of the appraisal’s market rent and the lease, unless three months of receipts support a lease above market. A lease in place is required. On a two-to-four-unit property, at most one unit can sit vacant.
One question is left open on a second lien: how the first-mortgage payment figures into coverage. Confirm on the file how the lender treats it. The lender’s own coverage calculation governs, and any arithmetic you run at home is illustrative.
How the Line Behaves Once You Have It
The line is variable-rate revolving credit. The CFPB describes a HELOC as open-end credit you can borrow against repeatedly, and notes that a lender might not allow additional credit if home value drops significantly. Read the lender’s HELOC disclosures for how that applies to your line.
This program’s draw rules are specific:
- At least 80% of the line is drawn at closing, and the closing draw is never less than $50,000. On the smallest lines, that means the whole line is drawn at closing.
- Later draws are at least $5,000 each.
- The first 5 years are interest-only on the drawn balance.
- Then a 25-year fully amortizing repayment period follows, for a 30-year maturity.
So this is not a standby reserve you leave mostly untouched. Plan on using most of what you open.
What Lowers or Blocks Your Number
Work through this list before you assume a figure.
- Credit tier. Mortgage history needs no 30-day late in the last 12 months. A bankruptcy, foreclosure, short sale, or deed-in-lieu needs 48 months behind you.
- Valuation path. Lines to $400,000 use an automated valuation (confidence score 85 or better) with a property inspection report, or a full interior appraisal. Lines above $400,000 need a full interior appraisal. Appraisal waivers are not accepted.
- Property type. Not eligible: rural-designated property, row homes, condotels, commercial or agricultural property, leaseholds, land trusts, age-restricted communities, hobby farms, modular and log homes, land contracts, and mixed-use. A property listed for sale in the prior 2 months or carrying a solar lien is also out.
- Occupancy. It must be a non-owner-occupied rental. The line is never offered on your own home or a second home.
- Exposure. At most 5 loans or $2,500,000 per borrower with the program.
- Borrower status. U.S. citizens, permanent residents, and non-permanent residents with a Social Security number. Foreign nationals and ITIN borrowers are not eligible.
- Declining-market flag. It lowers the ceiling by 5 points.
Then there is seasoning, the waiting period a lender wants before it will lend against a recent purchase or refinance. A rental bought or refinanced inside the last 6 months is not eligible (that clock runs from the last note date to the new note date), and the owner must have held title for 6 months (settlement date to note date).
The program asks for no reserves and no cash to close. For more on how Lendmire thinks about DSCR financing generally, see the complete DSCR loans guide.
Which Route Fits? A Side-by-Side
Not every rental fits this line. Here is how the main routes differ, each described by its own rules.
| Route | Who is underwritten | LLC stays on title? | First mortgage |
|---|---|---|---|
| DSCR HELOC, second lien | The rental’s rent | Yes | Stays in place |
| DSCR HELOC, first lien | The rental’s rent | Yes | None exists |
| Personal-income investment HELOC | You (credit, income, debts) | Generally no | Stays in place |
| DSCR cash-out refinance | The rental’s rent | Yes | Replaced |
The cash-out route replaces your first mortgage with a new, larger loan. That raises your balance, so coverage falls. If the existing first mortgage is one you want to keep, the second-lien line leaves it alone. If you plan a DSCR refinance anyway, do it first, then see whether a line still fits within the combined leverage.
You can also borrow against your own primary residence and contribute the funds to the LLC. That is a different, owner-occupied product. The line is secured by your home, not the rental, so the LLC is not the borrower.
When Deeding to a Personal Name Is the Better Move
Sometimes the rent-qualified line is the wrong tool. The rent may be too thin for the line you want. The credit tier may miss. Or the property type may sit outside the program. A personal-income line might then work, if your own income and debts support it.
Moving a rental out of an LLC has consequences. You give up the LLC’s liability separation while the property is in your name. There can be insurance and loan-term implications too, especially with a first mortgage in place. Talk to an attorney and your insurance agent before you move title, because moving title after closing can conflict with the lender’s terms.
Also note that an LLC does not remove your personal exposure. Guarantors on this program sign personally.
How you use the funds matters for records. Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
A line is working capital, not a purchase tool. It is never closed together with a purchase.
NerdWallet’s overview of HELOCs on investment property notes that you may have a smaller pool of lenders and can’t borrow as much as against a primary home. That matches what the 70% second-lien ceiling shows.
Key Terms Defined
DSCR: the debt-service coverage ratio, meaning gross monthly rent divided by the qualifying payment.
CLTV: combined loan-to-value, meaning all liens on the property added together and divided by its value.
Lien position: whether the lender’s claim sits first or behind another mortgage on the same property.
Vesting: how title to the property is held, whether in your name, a trust, or an LLC.
Guarantor: a person who personally promises to repay a loan made to an entity such as an LLC.
Draw period: on this program, the first 5 years, when you pay interest only on the drawn balance.
Frequently Asked Questions
Can I keep my LLC on title and still get a DSCR HELOC?
Yes, on the rent-qualified product, investment property only, subject to program terms. The members sign as guarantors, and a title holder who is not a borrower signs an acknowledgment and the security instrument. Personal-income investment HELOCs generally work differently and want the property in your name or a revocable trust.
What is the maximum I can borrow?
On a second lien, up to 70% CLTV at 720 or better, with lines up to $500,000. On a rental with no mortgage, a first lien reaches 75% LTV at 740 or better, or 70% from 700 to 739, on lines up to $500,000. Larger first-lien lines run to $1,000,000 at 65% LTV and 720 or better. All figures are subject to underwriting. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Do I need tax returns or W-2s?
No. The line is reviewed on the rental’s income: no traditional personal-income documentation, W-2s, or personal income calculation, subject to lender guidelines. The lender still documents the lease, the rent, your credit report, and the valuation.
How long do I have to own the rental first?
Two six-month clocks apply: the line is not available on a rental bought or refinanced in the last 6 months (last note date to new note date), and title must have been held for 6 months (settlement date to note date).
Where is this offered?
Lendmire is a non-QM DSCR mortgage broker (NMLS# 2371349) that places this loan through a wholesale lending network in 15 of its 16 licensed states. Programs change, and every file is underwritten individually.
Next Step
If you are considering a home equity line on a rental property and want to see how the numbers work, Lendmire can help you compare DSCR HELOC options based on the property, the rent, the equity available, credit profile, combined leverage, and your goals.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) arranging DSCR home equity lines of credit — standalone first or second liens on non-owner-occupied one-to-four-unit rentals, qualified on rent — through a wholesale lending network in 15 of its 16 licensed states (every licensed state except Tennessee). Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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. BiggerPockets – HELOC for property owned by LLC
4. NerdWallet – HELOC on an investment property
This article is part of Lendmire’s DSCR HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Can You Borrow on a DSCR HELOC for Investing in Mortgage Notes? · How Much Can You Borrow on a DSCR HELOC After a First Mortgage Modification? · How Much Can You Borrow on a DSCR HELOC When Adding or Removing a Name From Title?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- 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.