The Quick Read: Lendmire, a mortgage broker, places bank statement HELOCs through select wholesale lenders that read deposit history as income instead of tax returns. Which program is the right one depends on the borrower, the property, and the equity available, and a broker that shops several lenders can match the file to the program. A bank statement file is still a fully documented file.
- The lender totals deposits over a set window, removes transfers and other non-income credits, and applies an expense factor to business deposits.
- On an investment property, the network ceiling is 70% CLTV with a 700 minimum credit score and a $500,000 maximum line.
- Primary residences and second homes reach 90% CLTV only at a 720 credit profile or better, and lower credit tiers step down from there.
- The line is titled to an individual or a revocable living trust, never to an LLC.
- Lendmire’s HELOC lines are available in 16 states, a narrower footprint than its DSCR lending.
What Is a Bank Statement HELOC?
A bank statement HELOC is a home equity line of credit where the lender qualifies the borrower on deposit history instead of tax returns and pay stubs. It is not a separate legal product. It is a documentation method that a lender chooses to accept.
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.
Self-employed owners and investors with heavy write-offs are the usual users. Their tax returns often show less income than their accounts do. A lender that reads deposits can see cash flow that a Schedule C hides.
The label causes confusion. Some borrowers read it as a promise that nothing gets checked. The opposite is true. The lender still pulls credit, orders a valuation, reviews title, and calculates a debt-to-income ratio. Only the proof of income changes.
For reference, Lendmire is a mortgage broker. It places these lines through select wholesale lenders and never lends directly.
How Does Underwriting Treat the Deposits, Step by Step?
Underwriting turns raw deposits into a monthly income figure, then tests that figure against the borrower’s total debts and the property’s combined leverage. Each step removes some of the deposit total, so qualifying income is always lower than gross deposits. Here is the sequence.
1. Choose the accounts. The borrower supplies personal statements, business statements, or both. Each lender’s program sets the window, and 12 or 24 months of statements is the usual range.
2. Total the deposits. The underwriter adds up the credits over the window and divides by the number of months.
3. Remove non-income credits. Transfers between the borrower’s own accounts, loan proceeds, refunds, and one-time credits come out. Anything that is not repeatable business income does not count.
4. Apply an expense factor or a profit-and-loss statement. Deposits into a business account include money that goes straight back out as costs. The lender either reduces them by an expense factor or relies on a profit-and-loss statement prepared by a tax professional. The result is qualifying income.
5. Run the debt-to-income ratio. The line’s payment and every other monthly debt, including the first mortgage, go against qualifying income. On this network the maximum is 50%. It drops to 45% for credit profiles from 600 to 679, and a ratio above 45% requires at least a 680 score. The line is qualified on the interest-only payment calculated on the maximum draw, not on what the borrower plans to draw.
6. Check the collateral. Lines at or below $500,000 ordinarily use an automated valuation instead of a traditional appraisal. A higher CLTV may require a secondary valuation. Every line above $500,000 requires a full appraisal, and a borrower may request one on any line.
7. Check credit and title. The credit report can be no more than 90 days old at closing, and rescores are not allowed. The lender runs a single-bureau score keyed to the primary wage earner.
Here is how the ratio test plays out in practice. Say an investor’s deposits support qualifying income after exclusions and the expense factor. Total obligations, with the new line counted at its maximum-draw interest-only payment, land at 42% of that income. That file clears the DTI test at any eligible score. If obligations land at 47%, the file needs a 680 score or better. A borrower at 640 would need to cut debt or reduce the line size.
Does Federal Law Require Tax Returns?
No. The federal ability-to-repay rule for closed-end mortgages requires the lender to verify the income it relies on using reasonably reliable third-party records, and the Federal Register text of the final rule says the creditor needs to verify only the income or assets it actually relies on. The CFPB compliance guide lists tax returns as one acceptable source among several, next to W-2s and payroll records.
That is why deposit-based programs exist. The statements are the third-party record. Whatever a lender demands beyond that is its own overlay.
The line itself must also behave like a real revolving line. Trade commentary on home equity regulation stresses that genuine revolving features matter, which is one reason these lines carry real draw and repayment periods.
Which Providers Write These Lines?
Three provider types touch this space: large retail lenders, specialty non-bank lenders, and brokers that place files with wholesale partners. Which one fits depends on the borrower’s occupancy and documentation, so the sections below focus on how a broker matches files rather than on ranking names.
A broker does not offer one product. It reads the borrower’s occupancy, credit profile, leverage need, and documentation, then matches the file to the program whose guidelines fit. The right provider depends on those facts, and no single name fits every borrower.
Lendmire works this way, and its HELOC lines are placed through select wholesale partners. The parameters below describe that network. They are guidance ranges, not commitments, and every file is subject to lender guidelines and full review.
| Occupancy | Minimum credit | Maximum CLTV | Maximum line |
|---|---|---|---|
| Primary residence | 600 | 90% at 720+ only | $500,000 at 90% CLTV; $750,000 at 75% CLTV, 700+ (720 on the longer-runway program) |
| Second home | 640 | 90% at 720+ only | $500,000 |
| Investment property | 700 | 70% | $500,000 |
Leverage steps down as credit weakens. On a primary residence, a 700 score reaches 85% CLTV up to $500,000. A 640 score reaches 80%. A 620 score reaches 70% up to $400,000. On a second home, a 700 score reaches 85% and a 640 score reaches 75%. On an investment property there is no tier above 70%.
A Texas primary residence is a homestead and caps at 80% combined loan-to-value, so the higher primary-residence tiers never apply there.
What Structures and Variations Exist?
Two draw structures exist on primary residences and second homes. One has a 3-year interest-only draw followed by a 17-year fully amortizing repayment. The other has a 5-year interest-only draw followed by a 25-year repayment, which this article calls the longer-runway structure. Investment lines use the longer-runway structure only. Tennessee shortens both structures.
Several features apply across the board:
- The line sits in first or second lien position, so an owner with no mortgage can use it.
- At least 75% of the line is drawn at closing.
- Pricing floats through the draw and the repayment period and never converts to fixed.
Line size runs from $25,000 to $750,000, with a $10,000 floor in Michigan. A line above $500,000 is for primary residences only. It needs a credit profile of 700 or better (720 on the longer-runway structure), caps at 75% CLTV, and requires a full appraisal.
After closing, the minimum subsequent draw is $1,000 on the longer-runway structure, and $4,000 in Texas.
Eligible property types include single-family homes, 2-4 unit properties, PUDs, townhomes, and condominiums, including non-warrantable condos. Modular factory-built homes are eligible on the longer-runway structure only. These property types are not offered:
- manufactured homes
- co-ops
- condotels
- log homes
- commercial, mixed-use, or agricultural-zoned property
Where Does the General Rule Break?
The general rule is that deposits plus clean credit plus enough equity equals a line. These edge cases break it.
Entity title. The line must be vested in an individual or an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. An investor who deeded a rental into an LLC has two choices: change the vesting or use a DSCR cash-out refinance instead. A DSCR cash-out can generally close in an LLC, subject to lender program eligibility.
Portfolio size and exposure. A borrower can hold three lines at most. Combined exposure caps at $2,000,000 on the higher-leverage structure and $750,000 on the longer-runway structure. A borrower with more than 15 financed properties is not eligible.
Personal DTI. Every financed property counts against the borrower’s DTI, so a large portfolio can use up the capacity before the equity runs out.
Layered risk. A second lien combined with alternative documentation stacks two risk factors, so expect tighter overlays when both are present.
Derogatory credit. A bankruptcy needs 4 years of seasoning from discharge or dismissal. On primary residences and second homes, foreclosure history splits by program. One program seasons a foreclosure at 7 years and a deed-in-lieu, pre-foreclosure, or short sale at 4 years. The other declines the history regardless of age. Investment files follow the 7-and-4-year path.
Low scores. The 600 and 620 tiers on primary residences carry a further condition. Profiles below 640 are limited to single-family residences with a clean 12-month housing history under the longer-runway structure. Because second homes start at 640 and investment lines at 700, this limit reaches primary residences only.
Listed properties. A property listed for sale, or listed within the past 60 days, is ineligible in Indiana, North Carolina, Pennsylvania, Tennessee, Texas, and Washington.
Texas primaries. A 12-day waiting period, a one-lien-at-a-time rule, and 12-month seasoning apply to primary residences only. Texas second homes and investment properties are eligible as non-homestead transactions, and Texas properties are limited to 10 acres.
How Do You Choose Between a Bank Statement HELOC and DSCR?
The two products answer different questions. A bank statement HELOC underwrites the borrower: deposits, DTI, and combined leverage. A DSCR cash-out refinance reviews the property’s rental income: its rent against its full housing payment of principal, interest, taxes, insurance, and any HOA dues.
An investor with strong deposits and a rental that barely covers its own payment fits the HELOC route. An investor whose rent covers the payment comfortably, and whose personal DTI is already stretched, usually fits DSCR better.
| Factor | Bank statement HELOC | DSCR cash-out refinance |
|---|---|---|
| What is underwritten | Borrower deposits and DTI | Property rent vs. payment |
| Investment leverage | 70% CLTV ceiling | About 75% LTV on standard rentals |
| Credit floor | 700 on investment | 620 floor in parts of the network |
| Entity title | Individual or revocable trust | LLC generally allowed |
| First mortgage | Stays in place | Replaced by the new loan |
Note that clearing 1.00 coverage on a DSCR loan does not mean the property has positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Also, 1.00 is where many select programs start, and a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted.
A DSCR cash-out refinance usually needs about 6 months of seasoning. It replaces the first mortgage, so an investor with a low-rate first lien may prefer to keep it and add a line behind it. Lendmire’s complete DSCR loans guide covers the full set of DSCR program ranges.
Key Terms Defined
Bank statement HELOC: A home equity line qualified on deposit history instead of tax returns or pay stubs.
CLTV: Combined loan-to-value, which is every lien on the property divided by its appraised value.
Qualifying income: The monthly income left after the lender removes non-income deposits and applies an expense factor.
Expense factor: A percentage reduction the lender applies to business deposits to account for costs of operating the business.
DTI: Debt-to-income ratio, which is total monthly debts divided by qualifying income.
Draw period: The interest-only stretch when the borrower can take funds from the line.
Repayment period: The stretch after the draw period when the balance amortizes fully and no new draws occur.
Vesting: The legal form in which title to the property is held.
What Should You Prepare Before Applying?
Business income that runs through a personal account alongside household spending is hard to read. A dedicated business account makes the deposit story clear.
Gather the following before the file goes in:
- The full statement window for each account, with every page included.
- A written explanation for large or irregular deposits.
- A profit-and-loss statement, if the lender’s program allows one in place of an expense factor.
- Proof of the current first mortgage balance and payment.
- Insurance and title information on the property.
- The vesting documents, if the property sits in a trust.
- Evidence of any other financed properties, since all of them count toward DTI and exposure limits.
Uneven deposits and businesses under two years old get closer review, because the averaging window reflects less history. A borrower in that position should ask the broker which programs accept a shorter window.
How Do You Judge a Provider When No Neutral Ranking Exists?
Judge a provider by whether its guidelines fit your file, because nobody publishes a neutral ranking of these lenders. Ask the questions below.
- Does the program write non-owner-occupied lines at all?
- What is the maximum CLTV for your credit tier and occupancy?
- Does the line allow first-lien position if you own the property free and clear?
- How long is the draw period, and what is the repayment term?
- Does pricing stay floating through both periods?
- What is the expense factor, and can a profit-and-loss statement replace it?
- Which property types are excluded?
- Is title restricted to individuals and revocable trusts?
A broker with several wholesale partners can run those questions across programs at once. A borrower dealing with one lender gets one answer.
Frequently Asked Questions
Can I get a HELOC on a rental property using bank statements?
Yes, within limits. On this network, an investment-property line requires a 700 minimum score, caps at 70% CLTV, and tops out at $500,000. The borrower is reviewed on documented deposit income under the applicable program, subject to lender guidelines.
Can an LLC take out a bank statement HELOC?
No. Title must sit with an individual or a revocable living trust. A property already held in an LLC needs a vesting change or a DSCR cash-out refinance. A DSCR cash-out can generally close in an LLC, depending on program guidelines.
Do the lines have fixed or variable pricing?
Variable. Pricing floats through both the draw and repayment periods and never converts to fixed. Because payments can change, borrowers should weigh how a higher payment would affect their DTI before taking the line.
What properties are not eligible?
Manufactured homes, co-ops, condotels, log homes, commercial property, mixed-use property, and agriculturally zoned property are not offered. Condominiums are eligible, including non-warrantable ones.
Which states are covered?
Lendmire’s HELOC lines are available in Alabama, California, Colorado, Florida, Georgia, Indiana, Michigan, Montana, New Mexico, North Carolina, Ohio, Pennsylvania, Tennessee, Texas, Virginia, and Washington. Its DSCR programs cover 41 markets, including Washington, D.C., so the HELOC footprint is narrower.
Where Does This Leave an Investor?
The decision comes down to which test the file passes more easily: deposits and DTI, or rent against payment. Some files clear both, and the choice then turns on title, leverage, and whether to keep the existing first mortgage.
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. Lendmire’s page on bank statement HELOCs covers the program in more detail. The illustrative calculator on the site can give a rough sense of the structure.
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. CFPB / Federal Register, ability-to-repay final rule
2. CFPB, ability-to-repay and qualified mortgage compliance guide
3. HELN News, regulatory factors for home equity
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Top Bank Statement HELOC Providers for Gig and Platform Payout Income · How Much Can You Borrow on a Bank Statement HELOC on Retirement Income and Savings? · How to Get a Bank Statement HELOC When a Lis Pendens Is on Your Title
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- 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.