The Quick Read: Not directly: the rental’s equity, your credit tier and the rent set the line, and loan-out deposits do not enter the formula. The program reviews the file on rental income, so the money passing through your loan-out company is not what gets measured. Deposits matter only on a different path, where a lender reviews your file on personal bank statements.
- The formula: value times the maximum combined leverage, minus every lien already on the property, capped by the program ceiling.
- Second-lien ceiling: up to 70% combined loan-to-value at a 720 score or better, on lines from $50,000 to $500,000.
- First-lien ceiling: up to 75% loan-to-value at 740 or better on a rental with no mortgage, with lines running to $1,000,000.
- The coverage test: rent must be at least 1.10 times a stress payment on the whole credit limit.
- Loan-out role: your company is where the money comes from, not part of the math.
All figures are typical ceilings through select programs, subject to underwriting and lender guidelines. They are not offers.
Why Loan-Out Deposits Confuse the Question
A loan-out is a separate corporation that contracts out a performer’s or athlete’s services. Pease Bell, a CPA firm, describes the flow. The production pays the corporation, and the individual draws a salary and distributions from it. Laléa & Black, a law firm, describes the same pattern. The studio pays the loan-out, and the loan-out pays the talent a W-2 salary.
That is why your bank statements look odd to a loan officer. Large, irregular deposits land in a corporate account, and a smaller, steadier amount reaches your personal account. Many entertainers assume those big corporate deposits should buy a bigger line.
They don’t, on this product. A DSCR HELOC is a home equity line on a rental you keep. It is reviewed on the rental’s income, not yours. Your personal income is never calculated, and no traditional personal-income documentation, W-2s or pay stubs go into the file, subject to lender guidelines. The loan-out’s cash flow simply is not an input.
How Is the Maximum Line Calculated?
The line equals the property’s value times the allowed combined leverage, minus the first mortgage and any other lien. Then the program ceiling and the rent test can trim it further. Equity is the binding constraint, and no deposit total changes that.
Lenders measure leverage differently depending on lien position:
| Factor | Second lien (you keep your first mortgage) | First lien (rental has no mortgage) |
|---|---|---|
| Leverage measure | Combined loan-to-value (CLTV) | Loan-to-value (LTV) |
| Maximum leverage | Up to 70% CLTV at 720+ | Up to 75% at 740+; 70% at 700 to 739 |
| Line size | $50,000 to $500,000 | $50,000 to $1,000,000 |
| Larger lines | Not available above $500,000 | 65% LTV at 720+ above $500,000 |
| Minimum score | 720 | 700 |
CLTV means the first mortgage balance plus the new line, divided by the property’s value. Across the wholesale network Lendmire places files with, these are the ranges on offer, subject to underwriting.
Two details can lower the ceiling. A declining-market flag on the property takes 5 points off. The exposure limit is at most 5 loans or $2,500,000 per borrower with the program.
A Worked Example in Percentages
Say a rental carries a first mortgage equal to 40% of its value, and your credit tier is 720 or better. At 70% CLTV, the new line can reach about 30% of value. That assumes the rent test also clears and the line is at least $50,000.
Now say the first mortgage already equals 65% of value. Only about 5% of value is left. On most rentals that falls below the $50,000 minimum line, so there is no second-lien option. That is the case with recent high-leverage purchases.
Now take a rental with no mortgage and a 740 score. The first-lien ceiling is 75% of value on lines up to $500,000. Above $500,000, the ceiling drops to 65% for scores of 720 or better, and lines stop at $1,000,000.
On a high-value rental with a small first mortgage, the $500,000 second-lien cap binds before the CLTV does. In every case the arithmetic uses value and liens. Deposits never appear.
What Does the Rent Test Do to the Line Size?
The rent test can cap the line before equity does. The program wants a minimum DSCR (debt service coverage ratio, meaning gross monthly rent divided by the qualifying payment) of 1.10x. The qualifying payment is a fully amortizing payment of principal and interest on the entire credit limit at a stress rate. Taxes and insurance are not part of it. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.
Because the test uses the whole limit, a bigger line raises the qualifying payment. The same rent then covers it by a thinner margin. A rental with plenty of equity but modest rent may qualify for a smaller line than the equity alone suggests.
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 must be in place. On a two-to-four-unit property, at most one unit may sit vacant.
On a second lien, confirm on the file how the lender treats the first-mortgage payment in its coverage calculation. The lender’s own calculation governs. Any coverage example is illustrative only.
Where Loan-Out Deposits Actually Matter
Deposits matter in three narrow places, and none of them changes the borrowing amount.
First, this program requires no reserves and no cash to close. That removes the usual reason a loan-out earner’s statements get scrutinized. A personal-income or bank-statement line is a different story. There, a reviewer looks at deposits and asks where they came from.
Second, a bank-statement line is reviewed around documented deposits instead of rent. On those programs, deposits are the income. Whose deposits count becomes the central question. Money sitting in the loan-out’s corporate account is the corporation’s. Typically only funds actually moved into your personal account are usable. Undistributed profit is not spendable cash.
Third, you are paying a line you draw from. If your income is lumpy, the draw rules matter more than the deposit history, and the next section covers them.
| Question | DSCR HELOC | Bank-statement line | Cash-out refinance |
|---|---|---|---|
| What qualifies you | Rental income | Personal deposits | Rental income on a DSCR file |
| Do loan-out deposits matter? | No | Yes, once moved to you | No, on a DSCR file |
| Keeps your first mortgage | Yes (second lien) | Depends on the program | No, it replaces it |
| Main limit | Equity and the 1.10x test | Deposit history | Equity and program leverage |
The Draw Rules If Your Pay Is Lumpy
The line has a 5-year interest-only draw period on the drawn balance. A 25-year fully amortizing repayment period follows, for a 30-year maturity. The rate is variable.
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.
That structure changes the planning for lumpy pay. You are not opening a large line to leave it idle. You are taking most of it on day one and paying interest on that balance. If a big payday is months away, a bigger line means a bigger obligation sooner.
Sizing the line to what you will actually deploy is usually wiser than taking the maximum. This is a cash-flow call that belongs to you and your advisors.
What the File Looks Like
The property file matters more than your bank statements. The valuation path depends on line size:
- Lines up to $400,000: an automated valuation with a confidence score of 85 or better, plus a property inspection report, or a full interior appraisal.
- Lines above $400,000: a full interior appraisal.
- Waivers: appraisal waivers are not accepted.
Credit matters too. The program wants no 30-day mortgage late in the last 12 months. It wants 48 months since a bankruptcy, foreclosure, short sale or deed-in-lieu. Borrowers must be US citizens, permanent residents or non-permanent residents with a Social Security number. Foreign nationals and ITIN borrowers are not eligible.
The property must be a non-owner-occupied one-to-four-unit rental. Condominiums, townhomes, PUDs and lots to 10 acres are eligible property types. Rural-designated property, condotels, row homes, leaseholds, mixed-use and commercial property fall outside the program.
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 is offered in 15 of Lendmire’s 16 licensed states, every licensed state except Tennessee. Lendmire is a broker that arranges the line through a wholesale lender; it does not lend itself.
What About the Rental in an LLC and the Loan-Out as a Borrower?
Keep two entities straight. Your loan-out corporation is your pay channel. A rental LLC is a property-holding entity. They have different jobs.
On this program, the rental can stay in your LLC, since vesting in the owner’s LLC is allowed on investment property. The members sign as guarantors, subject to program terms. A title holder who is not a borrower signs a non-borrowing owner acknowledgment and the security instrument.
The loan-out does not need to be on the line. You borrow as the individual, and the corporation is simply where your income originates. Some other investment-property lines in the market require personal underwriting and do not allow an LLC on title. That is one reason the structure matters before the amount does.
How the Wider Market Compares
NerdWallet notes a smaller lender pool and stricter requirements, with multiple appraisals sometimes required. It cites loan-to-value limits on investment-property HELOCs that vary by lender, with many sitting below 70%. It also cites six months of reserves and at least 20% equity.
Those are market figures for personal-income lines, not this program’s. The DSCR HELOC described here tops out at 70% CLTV on a second lien and 75% LTV on a first lien. It requires no reserves, subject to underwriting. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
Key Terms Defined
DSCR: the debt service coverage ratio, meaning the rental’s gross monthly rent divided by the qualifying payment.
CLTV: combined loan-to-value, the first mortgage balance plus the new line, divided by the property’s value.
Loan-out deposit: a payment from a production or client into a corporation that contracts out your services, before any salary or distribution reaches you.
Second lien: a loan recorded behind your existing first mortgage, which stays in place.
Draw period: the 5 years in which you pay interest only on what you have drawn, before the 25-year repayment period begins.
What a Loan-Out Earner Should Do Before Applying
Keep the checklist short:
1. Pull the first mortgage balance and estimate the property’s value, so you can see real equity. 2. Confirm the property type is eligible and the title holder, whether you or your LLC, is identified. 3. Check that a lease is in place, with rent that covers the stress payment on the full line. 4. Confirm 6 months of ownership and no recent refinance, per the seasoning rule above. 5. Know your credit tier, since 720 is the second-lien floor. 6. Decide how much you will really draw, because most of the line funds at closing.
Keep loan-out and personal accounts clearly separate and document every transfer. That helps on any path where deposits are reviewed. It does not change the equity ceiling.
Frequently Asked Questions
Do loan-out deposits count as income on a DSCR HELOC?
No. The line qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income is not calculated, so corporate deposits are not counted either way. They would count only on a bank-statement line, and then typically only after being moved to your personal account.
Can larger deposits raise the amount I can borrow?
No. The amount comes from the property’s value, the liens on it, your credit tier and the rent test. A person with a modest deposit history and a paid-off rental can borrow more than one with huge deposits and a rental already near its leverage limit.
Can my rental stay in an LLC if my income comes through a loan-out?
Yes, on this program. Vesting in the owner’s LLC is allowed on investment property, subject to program terms. The members sign as guarantors. The loan-out is a separate entity that is not part of the title.
How soon after buying or refinancing can I open the line?
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). Both are measured at the new note date.
When is a cash-out refinance a better fit than a line?
When you want a larger equity pull than the $500,000 second-lien cap allows, or when you would rather replace the first mortgage than keep it. A line suits you if your first mortgage is worth keeping. A cash-out refinance replaces it.
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. The complete DSCR loans guide explains how the underlying loans work.
Equity, not payday size, decides how much a rental can give back.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges DSCR home equity lines of credit on rental property in 15 of its 16 licensed states (every licensed state except Tennessee) through wholesale lenders. The line is qualified on the rental’s rent rather than the owner’s personal income, and every line is subject to the lender’s guidelines and full underwriting. 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. Pease Bell: Loan-Out Companies in Film
2. Laléa & Black: Loan-Out Corporations, an Entertainer’s Guide
3. NerdWallet
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 to Pay Off a Hard Money Loan?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.