The Quick Read: Usually up to 70% combined loan-to-value on a second lien, meaning the first mortgage balance plus the new line can reach 70% of the rental’s value, on lines from $50,000 to $500,000 at a 720 credit score or better, subject to underwriting, and only if the rent also clears a stressed coverage test of 1.10x. Your line is the smaller of two numbers: the equity room and the rent-supported amount.
- Second lien: up to 70% CLTV at 720 or better, lines to $500,000.
- First lien on a rental with no mortgage: up to 75% LTV at 740 or better, 70% from 700 to 739, with lines to $500,000.
- Bigger first-lien lines run to $1,000,000, but leverage drops to 65% at 720 or better.
- The rent test runs on the entire credit limit, not only the amount you draw.
- Savannah sits in Georgia, one of the states where the program is offered. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
What Exactly Is a DSCR HELOC?
A DSCR HELOC is a revolving line of credit secured by a rental you keep. It is written either as a standalone second lien behind the first mortgage you keep, or as a standalone first lien on a rental with no mortgage. The rent qualifies the line, subject to lender guidelines.
That structure is why landlords with a low-balance or low-cost first mortgage like it. You leave the first loan alone and add a line beside it. No traditional personal-income documentation, W-2s or pay stubs enter the file. The lender still reviews your credit report, the lease, the title and the valuation.
The line is for non-owner-occupied one-to-four-unit rentals only, and it is not closed together with a purchase, placed in third-lien position, or opened against your own home or a second home.
Through select programs in Lendmire’s wholesale network, the line can be vested in your LLC, subject to program terms. The members sign as guarantors. A title holder who is not a borrower signs a non-borrowing owner acknowledgment and the security instrument.
Lendmire is the broker. It arranges the line through a wholesale lender, and that lender underwrites it. The program runs in 15 of Lendmire’s 16 licensed states, every licensed state except Tennessee. Georgia is on the list. Savannah landlords can ask about it, and the property still has to pass review.
How Do You Calculate the Maximum Line?
Start with value, apply the combined loan-to-value cap, subtract what you already owe, then test the rent. The result is the smaller of the equity ceiling and the rent ceiling. The dollar caps ($500,000 on most lines) apply last.
Limit one: the equity ceiling. Combined loan-to-value (CLTV) is the first mortgage balance plus the full new line, divided by the property value. On a second lien, the cap is 70% CLTV at a 720 score or better.
Run it in percentages. Say the first mortgage equals 50% of the rental’s value. At a 70% cap, the line can reach about 20% of value. If the first mortgage equals 60% of value, the room shrinks to about 10%. Every point of first-mortgage balance you pay down becomes a point of line room.
Two details change the math. A declining-market flag on the property lowers the ceiling by 5 points. The valuation also sets the base: a lower value leaves the cap alone but shrinks the dollars.
Limit two: the rent ceiling. The lender divides gross monthly rent by a qualifying payment. That payment is a fully amortizing payment on the entire credit limit, calculated at a stressed rate set a couple of points above the starting rate. The minimum coverage is 1.10x.
The qualifying payment is principal and interest only. Taxes and insurance are not inside it. Rent is the lesser of the appraisal’s market rent and the lease, unless three months of receipts support a lease above market.
Here is the catch. A bigger line means a bigger stressed payment, so the rent test can cap you before the equity does. A rental with generous equity but modest rent may qualify for less than the equity math suggests. On a second lien, confirm on the file how the lender treats the first-mortgage payment, because the lender’s own coverage calculation governs.
Limit three: the floor. Lines start at $50,000. If your equity room works out below that, there is no line to write.
Second Lien or First Lien: Which Leverage Applies?
Your first-mortgage status decides the lien position, and the lien position decides the leverage. Keep a mortgage and you can only take a second lien, with a 720 credit floor. Own the rental free and clear and you can take a first lien, with a 700 floor and a higher ceiling at the top tier.
| Feature | Second-lien line | First-lien line |
|---|---|---|
| Fits | Rental with a mortgage you keep | Rental with no mortgage |
| Leverage | Up to 70% CLTV | Up to 75% LTV at 740+ |
| Mid tier | None below 720 | 70% LTV at 700 to 739 |
| Max line | $500,000 | $1,000,000 |
| Large-line ceiling | Not offered above $500,000 | 65% LTV at 720+ above $500,000 |
Notice that a higher score on a second lien does not buy more leverage. The score gets you in the door at 720, and the cap stays at 70% CLTV. On a first lien, the score does move the ceiling between 70% and 75% on lines to $500,000.
A “nearly paid-off” rental still has a mortgage, so it takes a second lien. A first lien exists only when there is no mortgage on the property.
How the Line Works After Closing
The line is built for a landlord who wants a real draw, not a standby cushion. 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 draw period is 5 years, interest-only on the drawn balance. A 25-year fully amortizing repayment period follows, and the maturity is 30 years. The rate is variable. The rate and the pricing terms come with the lender’s disclosures.
Think about what that means for your planning. You pay interest on most of the line from day one. If you only want a small reserve for emergencies, this line is the wrong tool.
What Does the File Need?
Valuation depends on line size. Lines up to $400,000 can use an automated valuation (confidence score of 85 or better) with a property inspection report, or a full interior appraisal. Lines above $400,000 need a full interior appraisal on Form 1004, 1073 or 1025. Appraisal waivers are not accepted.
A rent schedule on Form 1007 supports the market-rent figure for the coverage test. You also need a lease in place. A two-to-four-unit property can have at most 1 vacant unit.
Credit rules are straightforward. The minimum is 720 on a second lien and 700 on a first lien, using the lender’s own credit report. You need no 30-day mortgage late in the last 12 months. A bankruptcy, foreclosure, short sale or deed-in-lieu needs 48 months behind it. No reserves and no cash to close are required, subject to underwriting.
Seasoning is the waiting period between a purchase or refinance and a new lien. 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).
Exposure is capped too. A borrower can hold at most 5 loans or $2,500,000 with the program. U.S. citizens, permanent residents and non-permanent residents with a Social Security number are eligible. Foreign nationals and ITIN borrowers are not.
What Property Types Fit?
Eligible: single-family homes, PUDs, townhomes, two-to-four-unit buildings, warrantable and non-warrantable condominiums, and lots up to 10 acres. The leverage tiers above govern every property type.
Not eligible on this lane:
- Rural-designated property
- Row homes
- Condotels
- Commercial or agricultural property
- Leaseholds and land trusts
- Age-restricted communities
- Hobby farms, modular homes and log homes
- Land contracts and mixed-use buildings
- A property listed for sale in the prior 2 months
- A property with a solar lien
Hazard insurance must cover both liens, with flood coverage where required. 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.
Why Does a Rental Line Come in Lower Than a Home Line?
A rental line sits below what you would expect on your own home because lenders treat rentals as riskier collateral. Fewer lenders offer them, and the leverage caps are tighter.
One investor on BiggerPockets described a bank capping a single investment property at 75% combined loan-to-value. That is one anecdote, not a benchmark. Across the wholesale network, the 70% CLTV cap on second liens is a program ceiling, not an offer.
A DSCR line removes the step of reading your personal income and debt against a rental line, which is why heavy personal debt matters less here, subject to lender guidelines.
Where Does a Low Appraisal or Thin Equity Leave You?
The cap and the first mortgage stay put, so the dollars come out lower. The file struggles only when the resized line drops below the $50,000 floor.
Three situations push a line toward the floor or past it:
1. The first mortgage is already near 70% of value.
2. The valuation comes in below your expectation.
3. The rent test caps the line below the equity ceiling.
If equity is thin, a smaller line is not always worth the closing cost and the interest-only exposure. Weigh it against the other options before you commit.
Line, Cash-Out Refinance or Neither?
If you want to keep a first mortgage you like, a second-lien line leaves it alone. If you want to replace the first loan, a DSCR cash-out refinance does that, and it resets the whole balance.
| Factor | DSCR HELOC | DSCR cash-out refinance |
|---|---|---|
| First mortgage | Stays in place | Replaced |
| Lien | Second, or first if no mortgage | New first lien |
| Leverage | 70% CLTV second lien | Up to 75% LTV standard rentals |
| Short-term rental | Per tiers above | 70% LTV on short-term-rental collateral |
| Draw | At least 80% at closing | Lump sum |
On a cash-out, coverage falls as you pull more cash, because the new payment covers the whole balance. Neither product buys your next property on its own. A line sized at 70% CLTV leaves little room once a first mortgage exists.
Some landlords prefer a bank statement line instead, which is reviewed on deposits, not rent. Lendmire’s piece How to Qualify for a Bank Statement HELOC for Savannah Landlords Tapping Equity covers that route. For the broader picture, see the complete DSCR loans guide.
One Short Note on Business Purpose
DSCR products 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 CFPB’s rule text on exempt transactions treats credit for non-owner-occupied rental property as business purpose, and the Federal Reserve’s copy of the staff commentary says the same. The practical result: some protections that come with a home line may not apply the same way here.
Key Terms Defined
DSCR: debt service coverage ratio, meaning gross monthly rent divided by the qualifying payment.
CLTV: combined loan-to-value, meaning the first mortgage plus the new line, divided by value.
LTV: loan-to-value, meaning one loan divided by value. It is used for first-lien lines.
Lien position: your lender’s place in line for repayment if the property is sold or foreclosed.
Draw period: the 5-year stretch when you pay interest only on what you have drawn.
Seasoning: the waiting period between a purchase or refinance and a new lien.
Frequently Asked Questions
What is the most I can borrow on a rental equity line?
A second-lien line tops out at $500,000 and 70% CLTV at a 720 score or better. A first-lien line on a mortgage-free rental can reach $1,000,000, though leverage falls to 65% LTV above $500,000. Your own number is the smaller of the equity ceiling and the rent-supported amount, subject to underwriting. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Does a higher credit score raise my leverage?
Not on a second lien, where 720 and above all reach the same 70% CLTV. On a first lien, 740 or better reaches 75% LTV, while 700 to 739 reaches 70% on lines to $500,000. The score opens the door, and on a second lien it does little else. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
Can I borrow if I bought or refinanced the rental recently?
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). A DSCR cash-out refinance may follow different timing depending on the program.
Can I use my LLC?
Yes, vesting in your LLC is allowed on investment property, subject to program terms. The members sign as guarantors. Foreign nationals and ITIN borrowers are not eligible on this program.
What if my rent is too low for the line I want?
Then the rent ceiling caps you before the equity does. The test runs a stressed payment on the whole credit limit, so a smaller line may clear 1.10x when a larger one does not. Extra equity will not fix a coverage shortfall.
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. You can reach the team at 828-256-2183.
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
2. CFPB — 12 CFR 1026.3 Exempt transactions
3. Federal Reserve’s copy of the staff commentary
This article is part of Lendmire’s DSCR HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR HELOC Requirements for Savannah Landlords Tapping Equity · DSCR HELOC Requirements for Sizing How Much Equity to Borrow · How Much Can You Borrow on a DSCR HELOC on a Vacant Rental Without a Lease?
Guides: DSCR HELOC in Savannah, GA · DSCR HELOC in Georgia
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
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.