The Quick Read: Usually up to 70% combined loan-to-value (CLTV) on a second lien, capped at a $500,000 line, but only after the 2-month listing look-back clears and the rent covers a stress payment on the whole line. Delisting changes when you can borrow. Equity and rent set how much, subject to underwriting.
- A second-lien line runs $50,000 to $500,000 at 70% CLTV and a 720 score or better.
- A rental with no mortgage can take a first-lien line: 75% LTV at 740 or better, 70% LTV from 700 to 739, and 65% LTV on lines above $500,000, up to $1,000,000, at a 720 score or better.
- A withdrawn listing still counts inside the 2-month look-back.
- The 1.10x rent test runs on the entire credit limit, not just the amount drawn.
- Everything here is a ceiling or floor, not an offer, and the lender’s own calculation governs. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
A landlord who pulled a for-sale sign may wonder whether the equity is still reachable.
What Is a DSCR HELOC on a Rental?
A DSCR HELOC is a revolving line of credit secured by a non-owner-occupied one-to-four-unit rental, qualified on the property’s rent instead of the owner’s personal income. It is written as a standalone second lien behind the first mortgage you keep, or as a standalone first lien on a rental with no mortgage.
The federal consumer-finance regulator describes a HELOC as an open-end revolving line with a draw period. That part is standard. What is not standard is the label. “DSCR HELOC” is a market term, and it can mean a cash-out refinance, a closed-end second, or a line underwritten on the borrower’s income. Confirm which product a lender means before comparing numbers.
On this program, the rent qualifies the line. The file carries no tax returns, W-2s, pay stubs, or debt-to-income calculation, subject to lender guidelines. The rental’s income is still documented: the lease, the credit report, and the valuation are all in the file. LLC title is allowed, subject to program terms. The members sign as guarantors, and a title holder who is not a borrower signs a non-borrowing owner acknowledgment and the security instrument.
For the full picture of how this loan family works, see Lendmire’s complete DSCR loans guide.
Does Delisting Change the Amount or Only the Timing?
Delisting changes the timing. The amount comes from the same leverage grid as any other rental. A rental listed for sale in the prior 2 months is not eligible, and a withdrawn listing can still count. The clock runs from the withdrawal, so a rental pulled last week is not clear.
Why the block? The line is built for a landlord who is holding the property. A sale would pay the lender off almost immediately, which is the opposite of what the product is for.
Once the look-back clears, the file is sized like any other, though one thing can still reduce the amount: a lender-flagged declining market lowers the ceiling by 5 points.
How Is the Maximum Line Calculated?
Take the smaller of three numbers: the equity ceiling, the rent-coverage ceiling, and the dollar cap. Then check that the result clears the $50,000 line floor.
Step one, the equity ceiling. On a second lien, the first mortgage balance plus the new line, divided by value, cannot exceed 70% CLTV. The Freddie Mac glossary defines CLTV the same way: total loans against the property divided by property value.
Worked example in percentages only: a first mortgage at 40% of value leaves 30% of value (70% minus 40%) for the new line. A first mortgage at 65% of value leaves 5%, which on most properties falls under the $50,000 minimum. That file does not work as a second lien.
Step two, the dollar cap. A second-lien line tops out at $500,000. On a high-value rental the cap, not the equity, becomes the limit.
Step three, the rent test. The minimum coverage is 1.10x: gross monthly rent divided by the qualifying payment. That payment is fully amortizing principal and interest on the entire credit limit at a stressed start rate. It is a stress payment, not what you will pay.
Rent is the lesser of the appraisal’s market rent and the lease, unless three months of receipts support a lease above market. Taxes and insurance are not part of the qualifying payment. Confirm on the file how the lender treats the first-mortgage payment on a second lien.
This program divides gross monthly rent by the stress payment, which differs from the net-operating-income measure some references use. Same idea, different inputs.
What Does Credit Do to the Ceiling?
Credit sets which lien position is open to you and, on a first lien, how much leverage you get. The tier is the lender’s own credit report.
| Lien | Credit score | Maximum | Line size |
|---|---|---|---|
| Second lien | 720 or better | 70% CLTV | $50,000 to $500,000 |
| First lien, no mortgage | 740 or better | 75% LTV | Up to $500,000 |
| First lien, no mortgage | 700 to 739 | 70% LTV | Up to $500,000 |
| First lien, no mortgage | 720 or better | 65% LTV | Above $500,000, to $1,000,000 |
Below 720 there is no second-lien cell. A borrower who keeps a first mortgage can only take a second lien, so a 700-to-719 score with a mortgage in place is an eligibility gap, not a leverage gap. First liens exist only on a rental with no mortgage.
Mortgage history matters too. The file needs no 30-day mortgage late in the last 12 months, and 48 months since any bankruptcy, foreclosure, short sale, or deed-in-lieu. Reserves and cash to close are not required. Foreign nationals and ITIN borrowers are not eligible.
Which Clock Are You On?
Two separate clocks apply, and clearing one does not clear the other. This is where delisted files get stuck.
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).
| Your status | What it means for the line |
|---|---|
| Listed now | Not eligible |
| Withdrawn inside 2 months | Not eligible; the listing still counts |
| Past the 2-month look-back | Eligible if seasoning and the rent test clear |
| Never listed | Look-back does not apply |
An investor who delisted three months ago but refinanced the rental four months ago has cleared the listing window and still sits inside seasoning. Track both dates before the file goes in.
What Does the File Need After Delisting?
A lease in place is required. A two-to-four-unit property can have at most 1 vacant unit. A rental you emptied to prepare for sale needs a tenant again before the rent test means anything.
The core documents are the lease, a rent opinion, the credit report, and the valuation. Lines up 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 take a full interior appraisal. Appraisal waivers are not accepted. Title work is a full policy on first liens and on second liens above $400,000, and an owner-and-encumbrance report on smaller second liens.
Check the first mortgage documents. They must allow a junior lien. That is a paper check worth doing before ordering anything.
Eligible property types include single-family, PUD, townhome, two-to-four units, and warrantable and non-warrantable condominiums. Rural-designated property, condotels, row homes, leaseholds, land trusts, and properties with a solar lien fall outside it. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
How Do Draws and Repayment Work?
At least 80% of the line is drawn at closing, and the closing draw is never under $50,000. On the smallest lines, that means the whole line is drawn at closing. Later draws are at least $5,000 each.
The draw period is 5 years, interest-only on the drawn balance. A 25-year fully amortizing repayment period follows, for a 30-year maturity. The rate is variable. Rate and pricing terms come with the lender’s disclosures.
A HELOC’s payments are due on the amount borrowed, and the rental secures the debt. Because this line is drawn mostly at closing, the interest-only balance starts high. Size the line to the project, not to the maximum.
Don’t Oversize the Line
Coverage is tested on the full limit. A larger line taken just in case raises the stress payment and makes the rent hurdle harder, even if you never draw it. If rent covers 1.10x on a smaller line, it may not cover it on a larger one. Size to the need, then test.
HELOC or Cash-Out Refinance While You Wait?
If the listing window or the sizing math blocks the line, a DSCR cash-out refinance is the fallback. It replaces the first mortgage instead of sitting behind it, so any favorable terms on the existing first loan are given up.
The line leaves your first mortgage alone: only that loan’s balance counts against the CLTV, never its terms. A cash-out resets everything.
Delisting rules on cash-out are set program by program. Agency rules differ again, and they are agency rules, not DSCR program rules. Cash-out on a standard rental under select DSCR programs commonly reaches 75% LTV, and on short-term-rental collateral 70% LTV, with larger loan amounts available than the line allows.
Banks differ as well. NerdWallet reports that a HELOC on an investment property is possible, but the lender pool is smaller and you cannot borrow as much as against a primary home. Bank-style lines are underwritten on personal income, which is a different product from the rent-qualified line described here.
Using the Cash for the Next Purchase
If the plan is to use the draw as a down payment, a purchase lender will typically want the funds traced and seasoned. Sort that out before contracting.
Portfolio and Program Limits
The program caps exposure at 5 loans or $2,500,000 per borrower. Other rentals in a portfolio stay eligible if they clear their own look-back, seasoning, and rent test. A listing on one property does not disqualify another.
This line is offered in 15 of Lendmire’s 16 licensed states, every licensed state except Tennessee, and is arranged through a wholesale lender in Lendmire’s network. Lendmire does not lend, and nothing here is a commitment to lend.
Key Terms Defined
DSCR: the rent divided by the qualifying payment; here, gross monthly rent over a stress payment on the full line.
CLTV: the first mortgage balance plus the new line, divided by the property’s value.
Look-back: the 2-month window in which a for-sale listing, including a withdrawn one, makes the rental ineligible.
Seasoning: the 6-month clocks tied to the last note date and to time on title.
Second lien: a loan secured behind a first mortgage that stays in place.
Draw period: the 5 years during which the line is interest-only on the drawn balance.
Frequently Asked Questions
How long after delisting can I get a DSCR HELOC?
The 2-month look-back runs from the withdrawal date, so the earliest point is once those 2 months have passed. Seasoning is separate, so a recent purchase or refinance can keep the file out even after the listing window clears.
Is the rent test run on what I draw or on the whole line?
On the whole line. Coverage of at least 1.10x is tested against a fully amortizing payment on the entire credit limit at a stressed rate. Drawing less does not lower the hurdle.
What does seasoning require on a delisted rental?
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).
Can I use the line if the rental is in an LLC?
Yes, subject to program terms.
When does a cash-out refinance make more sense?
When the need exceeds the $500,000 second-lien cap, when the equity leaves too little room above the first mortgage, or when replacing the first mortgage is acceptable. Because the line leaves the first mortgage untouched, a low existing first mortgage favors the line when it fits.
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. Request a quote at Lendmire’s quote page or call 828-256-2183.
About Lendmire
Lendmire (NMLS# 2371349) is a non-QM DSCR mortgage brokerage. It arranges DSCR home equity lines of credit on rental property through wholesale lending partners in 15 of its 16 licensed states, every licensed state except Tennessee. Each line is written on a non-owner-occupied one-to-four-unit rental and reviewed individually by the lender under the program’s credit and leverage guidelines. 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. CFPB: What Is a Home Equity Line of Credit (HELOC)
3. 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 on That Property? · How Much Can You Borrow on a DSCR HELOC as a Co-Owner Who Is on the Deed? · How Much Can You Borrow on a DSCR HELOC for Refinancing a Balance Into a New HELOC?
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
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.