The Quick Read: Commission and bonus pay can qualify you for a line on a rental when lenders average it over about two years, add the new payment to your other debts, and find the ratio under 50%, while credit and equity are tested separately, subject to lender guidelines.
- On an investment property, the network ceiling is 70% combined loan-to-value (CLTV), and the line tops out at $500,000.
- Variable pay is usually averaged, and a declining trend can shrink the number or remove the income.
- Title must sit with you personally or in a revocable living trust. An LLC cannot hold it.
- If the averaged income comes up short, a DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines.
What Is an Investment Property HELOC?
An investment property HELOC is a revolving line of credit secured by a rental you own. You borrow against it when you need cash, and you pay interest on what you use. It is a different product from a DSCR loan, and the two test different things.
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.
Across Lendmire’s wholesale network, the investment-property line is a standalone line that can sit in first or second lien position. It runs a 5-year draw period with interest-only payments, followed by a 25-year fully amortizing repayment period. At least 75% of the line is drawn at closing. Pricing floats through both periods and never converts to fixed.
Three tests decide the file:
1. Income. Your debt-to-income ratio must fit within the program limit.
2. Equity. Your combined loan-to-value must stay at or under 70% on an investment property.
3. Credit. You need at least a 700 score, which is a hard floor. Scores of 700 and 720 both reach the same 70% CLTV tier, so a higher score buys eligibility rather than leverage.
Strong income does not rescue thin equity. Strong equity does not rescue a ratio that runs over the limit. Each test stands on its own.
A line above $500,000 is not available on an investment property, and full appraisals begin only above $500,000. Most investment lines are therefore valued with an automated valuation instead of a full appraisal. A higher CLTV can still trigger a secondary valuation, and a borrower can request a full appraisal at any time.
How Do Lenders Treat Commission and Bonus Income?
Lenders treat variable pay as less certain than salary, so they average it and test the trend. Salary and pension income are easy to project. Commission, bonus, and overtime are usually averaged, and a lender may discount them further. Lenders commonly look for about two years in the same role or field, though not always at the same employer.
Here is how the pieces fit together, step by step.
1. Choose an income path. Full documentation uses W-2s and a recent paystub. Alternative documentation uses bank statements or 1099s, and it depends on the program.
2. Document the pay history. W-2s and paystubs show what you earned and how it changed. A written statement from your employer that the bonus plan continues can help.
3. Average the income, then test the trend. A stable or rising history is averaged. A declining one is usually cut to the lower recent figure or left out.
4. Run the debt-to-income test. The lender adds the new line’s payment, your first mortgage, and your other monthly debts. It divides the total by your qualifying monthly income.
5. Run the equity test. First lien plus the new line, divided by the property’s value, must stay at or under 70% CLTV.
6. Check credit, title, and valuation. The credit report cannot be older than 90 days at closing, and the lender does not allow rescores.
The debt-to-income ceiling on most files is 50%. The lender reviews your file on the interest-only payment, calculated as if you had drawn the full line. That matters. Borrowing half the line does not lower the number used to qualify you.
How the property’s own rent counts varies by lender. Some give partial credit for documented leases, and others give none. Gather current leases either way.
What Lenders Look At, by Income Type
| Income type | What the lender reviews | Typical documents |
|---|---|---|
| Salary | Current rate, job stability | Paystub, W-2 |
| Bonus | Multi-year average, plan continuity | W-2s, employer statement |
| Commission (W-2) | Averaged earnings, trend | W-2s, year-to-date paystub |
| Commission (1099) | Net earnings after expenses | 1099s, returns, statements |
How Averaging Works in Practice
A simple index shows the logic. These are illustrative units, not dollar amounts.
- Rising pay. Year one is 100 and year two is 120. The average is 110, and that is the number that lands in the file.
- Flat pay. Both years are 100. The average is 100, and the file is clean.
- Declining pay. Year one is 120 and year two is 100. A lender may use 100, or something lower, or exclude the bonus.
The Fannie Mae Selling Guide gives a useful contrast for where this convention comes from. Fannie Mae’s guide on bonus and commission income recommends a two-year history. It allows a shorter history, down to 12 months, when other positive factors are present. It also annualizes an annual bonus by dividing it across 12 months. That guide governs agency loans, not equity lines, so treat it as background on the convention only.
Why Credit and Equity Don’t Move With Income
A larger commission check does not raise the 70% CLTV ceiling. The CFPB’s HELOC booklet explains that a lender sets the credit limit as a percentage of the home’s value minus what you already owe. Network programs follow that logic, with the investment-property percentage capped at 70%.
What Structures and Variations Exist?
The main variations are the documentation path, the property type, and how you hold title. Each one can change whether a file works.
Full Documentation vs. Alternative Documentation
Full documentation suits W-2 commission and bonus earners with a steady two-year record. Alternative paths suit 1099 earners and borrowers with irregular deposits. Some programs review 12 to 24 months of bank statements or one to two years of 1099s, depending on the program. These borrowers qualify on documented income under the applicable program, subject to lender guidelines.
Business bank accounts need a 680 minimum for the deposit analysis. An investment line already floors at 700, so the statements are never the binding limit on a rental.
Gross 1099 income is not net income. The analysis is not just adding up deposits, and an expense factor may apply. Tax treatment varies; consult a qualified professional.
Property and Title Rules
Eligible properties include single-family homes, 2-4 unit buildings, PUDs, townhomes, and condominiums, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not eligible.
Title must be held by you as an individual or by an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. This is the sharpest difference from a DSCR loan. A rental already deeded to an LLC needs a vesting change first, or a DSCR cash-out instead.
Exposure and Credit History Limits
A borrower can hold up to three lines across all properties. Combined exposure across those lines is capped by program: $2,000,000 on the higher-leverage program and $750,000 on the longer-runway program. Each individual investment line still tops out at $500,000. A borrower with more than 15 financed properties is not eligible.
A bankruptcy needs 4 years of seasoning from discharge or dismissal. On an investment file, a foreclosure needs 7 years of seasoning. A deed-in-lieu, pre-foreclosure, or short sale needs 4.
Where These Lines Are Offered
Lendmire arranges equity lines in its 16 full-service states only: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA. That is narrower than its DSCR footprint of 41 markets, including Washington, D.C. A line is subject to lender guidelines and full file review. This is not a commitment to lend.
Where Does the General Rule Break?
The rule is that variable pay gets averaged. It breaks in six common places.
A declining year. If commissions fell recently, the lender may use the lower figure or exclude the variable portion. Income that has stabilized after a decline is easier to use than income still falling.
A short history. Less than two years in a commission role is the most common stress point. Some programs accept a shorter record with offsetting strengths. When the history is short, qualifying on the rental’s income through a different product may fit better.
A new commission plan or job change. A new pay structure has no averaging history. Staying in the same field helps, but a new plan can reset the clock.
1099 commission. Self-employed earners are reviewed on net income, not gross receipts. Unreimbursed business expenses lower the usable number.
LLC-titled rentals. Moving a property out of an LLC to qualify has asset-protection consequences. That decision is worth weighing before you apply, since the title rule is firm.
A big income and a small equity cushion. Income cannot lift the 70% CLTV ceiling. A rental that is already at 65% combined leverage has little room for a new line.
One more point deserves a plain statement. The payment on a line floats. The CFPB explains that a HELOC is an open-end line with a draw period and a repayment period. It also warns that a borrower who falls behind can lose the home. On a rental, the line’s payment must fit alongside the first mortgage, the rental’s expenses, and your other debts. A floating payment makes that math less stable than a fixed one.
When Should You Consider DSCR Instead?
A DSCR loan is worth a look when your averaged personal income is the weak link. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. It compares rent to the full monthly housing obligation: principal, interest, taxes, insurance, and any HOA dues.
Clearing 1.00 on that test is not the same as positive cash flow. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Lendmire’s complete DSCR loans guide explains the calculation in full.
| Factor | Investment HELOC | DSCR cash-out refinance |
|---|---|---|
| Reviewed on | Personal income, equity, credit | Property rent vs. payment |
| Max leverage | 70% CLTV, investment property | Around 75% LTV on most files |
| Seasoning | None stated | About 6 months common |
| Title | Individual or revocable trust | LLC allowed, per program terms |
| Payment | Floats, never fixed | Fixed structures available |
| Size | $25,000 to $500,000 line | Up to $3,000,000 on standard programs |
The DSCR column shows typical ranges across select lenders in the network. Coverage of 1.00 is where select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and leverage. Most programs want a score of around 660 or better, and 700+ unlocks the strongest leverage tiers. LLC-titled borrowers can use DSCR, depending on program guidelines.
The choice often comes down to purpose. A line gives you flexible access to equity in stages. A cash-out refinance gives you a lump sum at a fixed structure.
If the equity is large and your pay history is clean, the line may be the cheaper tool for short-term capital. If your pay is volatile or your title sits in an LLC, DSCR may be the more workable fit. Either way, the decision follows your documents, not your preference.
Readiness Checklist Before You Apply
Gather these first so the file reads cleanly.
- Two years of W-2s and your most recent paystub, or 1099s and returns
- An employer statement that bonuses or commissions are ongoing, if you have one
- Current leases on the rental
- A list of all liens and your first mortgage balance
- Proof of title in your name or a revocable trust
- Current insurance declarations
- A written explanation for any dip in pay
Also compare your estimated CLTV to the 70% ceiling, and run your debt-to-income at the full line amount, not the amount you plan to draw.
Key Terms Defined
Combined loan-to-value (CLTV): The total of your first mortgage and the new line, divided by the property’s value.
Debt-to-income ratio (DTI): Your total monthly debt payments divided by your monthly qualifying income.
Draw period: The first phase of a line, when you can borrow and pay interest only.
Income averaging: A method that spreads variable pay across a multi-year history to find a steady monthly figure.
Annualizing: Spreading a yearly bonus across 12 months to get a monthly figure.
DSCR: A ratio of rent to the full monthly housing obligation on a rental property.
Frequently Asked Questions
Can a commission earner get a HELOC on a rental property?
Yes, when averaged commission income, together with the new payment and existing debts, fits the debt-to-income limit and the file also clears the credit and equity tests. The investment-property line requires a 700 credit score and stays at or under 70% CLTV. Title must be in your name or a revocable trust. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
How long a pay history does a lender want?
Lenders commonly look for about two years in the same role or field, and not always at the same employer. A shorter record can work with offsetting strengths in some programs. A declining trend can cut the usable amount or remove it.
Does my best commission year count?
No. The average counts, not the peak. A rising trend helps the average, and the average is what appears in the file.
What if my averaged income is too low for the line?
A DSCR loan is the usual fork, since it qualifies primarily on the property’s rent covering the payment. Leverage and credit rules still apply, and eligibility depends on the lender. Coverage below 1.00 is available through select lenders in the network, with leverage and terms adjusted.
Can my LLC hold the property and still get an equity line?
Not on this network’s lines. Title must be held by you as an individual or by a revocable living trust. A property already deeded to an LLC needs a vesting change, or a DSCR cash-out instead.
Next Steps
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. The brokerage arranges financing through select lenders in its wholesale network, and it is never the lender. The site’s calculator gives an illustrative estimate only.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges home equity lines of credit in its 16 full-service states through wholesale lenders, on primary residences, second homes and investment properties. 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. Fannie Mae Selling Guide – Bonus, commission, overtime, and tip income
This article is part of Lendmire’s investment property HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get an Investment Property HELOC With a 700 Score and High DTI? · Can You Get an Investment Property HELOC in a Living Trust? · Can You Get an Investment Property HELOC With One Year of History?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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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.