Banks That Offer a Bank Statement HELOC for Investors Funding Down Payments

The Quick Read: Large retail banks generally underwrite home equity lines on tax returns, so the bank statement version mostly comes from non-bank, non-QM lenders that a mortgage broker can reach. Investors on that route can often use the drawn cash toward a rental down payment, as long as the purchase lender accepts borrowed funds. On Lendmire’s wholesale network, a line secured by an investment property tops out at 70% CLTV, with a $500,000 maximum line and a 700 minimum credit score.

• A bank statement HELOC changes how income is documented. It does not change the equity, credit, or collateral rules.
• Investment collateral and primary-residence collateral follow different leverage tables.
• The line approval and the purchase approval are two separate decisions.
• Borrowed down payment funds are not automatically accepted. Ask the purchase lender before you draw.
• A DSCR purchase loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. The line payment sits outside that ratio but still comes out of your pocket.

What a Bank Statement HELOC Actually Is

A home equity line of credit is a revolving loan secured by a property you already own. A bank statement HELOC is the same product with a different way of proving income.

Instead of tax returns and W-2s, the lender reads 12 or 24 months of personal or business deposits. It averages them and applies the program’s income rules. This suits self-employed owners and investors whose write-offs shrink taxable income while deposits stay strong.

The documentation method is the only thing that changes. The borrower still needs real equity, acceptable credit, and an eligible property. Income is documented under the applicable program, subject to lender guidelines.

The rate on these lines floats through both the draw period and the repayment period, and it never converts to fixed. Payments can therefore rise or fall over the life of the line. That matters when the cash funds a purchase, because you will carry the line payment alongside the new loan.

Key Terms Defined

• Bank statement HELOC: a home equity line that qualifies income from 12 or 24 months of bank deposits instead of tax returns.
• CLTV (combined loan-to-value): all loans on a property added together, divided by its value.
• DSCR (debt service coverage ratio): monthly rent divided by the property’s monthly payment on principal, interest, taxes, insurance, and any HOA dues.
• Draw period: the stretch when you can borrow from the line, usually paying interest only.
• Seasoning: a waiting period, here the time borrowed funds sit in your account before a purchase lender treats them as yours.
• Non-QM: a loan that sits outside conventional agency underwriting rules.

Who Actually Offers a Bank Statement HELOC for Investors?

The honest answer to “which banks?” is a category, not a company. This article names no institutions, because availability depends on your property, credit, state, and the program your file fits.

A broker matters in the third row. Wholesale lenders take files through brokers, and each program has its own limits. Lendmire is a mortgage broker, not a lender. It matches a scenario to a program across several wholesale HELOC lenders, and the program that fits depends on your property type, credit profile, leverage need, and documentation.

How Underwriting Treats the Line, Step by Step

Two loans mean two approvals. Here is the sequence.

Step 1: The line is approved on its own collateral. The lender looks at the property securing the line, your credit, your combined leverage, and your documented income. On this network, business bank accounts need a 680 minimum credit score for the deposit analysis, but an investment line already requires a 700 score. Income documentation is therefore rarely the limiting factor there. Credit and CLTV are. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.

Step 2: Valuation. An investment line caps at $500,000, and full appraisals start above that size. So an investment line is generally valued with an automated model rather than a traditional appraisal. A borrower can still request a full appraisal.

Step 3: Debt-to-income is checked. Programs in the network cap DTI at 50%, with 45% for credit profiles from 600 to 679. The lender reviews your file on the interest-only payment calculated on the maximum draw, not on what you plan to use.

Step 4: The line closes and you draw. At least 75% of the line is drawn at closing, so size the line to the cash you actually need, because you will pay interest on most of it from day one. Subsequent draws have a $1,000 minimum, with a $4,000 minimum in Texas on one program.

Step 5: The purchase lender reviews the cash. This is the second gate, covered next.

The Second Gate: Will the Purchase Lender Accept the Cash?

The line itself does not restrict how you spend the money. Yahoo Finance notes that homeowners can use equity for a down payment on an investment property, provided they have enough equity. The purchase lender decides whether borrowed money counts.

Policies differ across the network. Some DSCR purchase lenders accept a seasoned, documented draw from a line on a different property. Others look harder at any borrowed funds. A new second lien placed on the property you are buying is a different question from a draw against a separate property, so ask about each case separately.

Ask the purchase lender these questions before you open or draw the line:

• Do borrowed funds count toward the down payment?
• Do they count toward closing costs?
• Do they count toward reserves? Reserves are commonly around 6 months of PITIA on a DSCR purchase, and borrowed money is often treated more strictly there.
• Is there a cap on the borrowed share, or a minimum of your own funds?
• Is there a seasoning period on the draw?

Then document the trail. Keep the draw confirmation, the transfer, and the deposit into the account you will close from. Clean paper answers most of what a lender asks.

What the Network’s Programs Look Like

Lendmire brokers HELOCs through select wholesale partners, and the figures below apply only within each program’s own terms. Two wholesale programs shape the picture. One offers a longer runway on the line, and one offers higher leverage. Each is subject to lender guidelines and full file review.

On an investment property, the ceiling is 70% CLTV, and credit of 700 or better is the floor. Credit above 700 buys no extra leverage on investment collateral, because 720 and 700 both reach the same 70% cap. Investment lines follow a 5-year interest-only draw with a 25-year amortizing repayment. Pricing moves through both periods and never converts to fixed. Lines run up to $500,000.

On a primary residence or second home, the ceiling reaches 90% CLTV, and only at a credit profile of 720 or better. Two draw structures exist there: a 3-year draw with a 17-year repayment, and a 5-year draw with a 25-year repayment. Tennessee shortens both.

Other rules to know:

• Title: the individual borrower or a revocable living trust must hold title. LLCs, corporations, partnerships, and irrevocable or land trusts cannot. A property already deeded to an LLC needs a vesting change or a DSCR cash-out refinance instead.
• Eligible properties: single-family, 2-4 units, PUDs, townhomes, and condos, including non-warrantable ones. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural zoning are not offered.
• Exposure: a borrower is limited to three lines, and owning more than 15 financed properties is disqualifying.
• Availability: HELOC programs run in Lendmire’s 16 full-service states (AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, WA). That is narrower than the 41-market DSCR footprint. A property listed for sale in the past 60 days is ineligible in NC, PA, TN, TX, and WA.

A Worked Example (Percentages and Ratios Only)

Picture an investor with a primary residence, a 720 credit score, and documented deposits from a business. The goal is a rental purchase financed on a DSCR loan at 75% LTV, which leaves 25% down plus closing costs to cover. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.

The investor opens a line on the primary. At 720, that collateral can reach the higher primary-residence CLTV tier, subject to lender guidelines. After the draw sits in the account with a documented trail, the DSCR purchase lender reviews it.

Suppose the rental’s rent clears roughly 1.2x against its full payment. The purchase loan can look healthy, because the ratio measures only the rental’s rent against the rental’s payment. The line payment is not in it.

That is the catch. A 1.2x ratio is not positive cash flow. Repairs, vacancy, management, utilities, and capex all sit outside the calculation, and so does the line payment. The strongest files clear both tests: enough equity on the line property and enough rental coverage on the purchase.

This is a modeled illustration, not a quote or a prediction for any property.

Where the General Rule Breaks

Investment collateral is thinner. A line on a rental follows the 70% CLTV investment table and costs more than a primary-residence line. Benzinga notes that pricing can run higher on investment properties and that default risks foreclosure on that property.

Your home is the collateral. The CFPB describes a HELOC as an open-end line you can borrow against repeatedly during a draw period, followed by repayment, and warns that falling behind could cost you the home. Nasdaq makes the same point about using a line for a down payment. Your new rental is not the only property at risk.

Borrowed funds and reserves. Funds that count for a down payment may not count as reserves. Confirm this with the purchase lender.

A fully borrowed purchase. Financing close to 100% of the price strains both approvals. The DSCR lender wants meaningful equity in the deal. A common DSCR purchase lands at 75%-80% LTV on a purchase, and select programs reach 85% LTV on a purchase with roughly a 700+ score. Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.

Coverage below 1.00. Where 1.00 is the starting floor for select programs, a separate select-lender path takes coverage below 1.00 with leverage and terms adjusted. Borrowing the down payment does not change which path applies.

Short-term rentals. Purchases on STR collateral run to 75% LTV, and cash-out on STR collateral is around 70%. They typically expect a 640+ score and about 12 months of hosting history.

Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.

HELOC, DSCR Purchase, or Cash-Out Refinance?

Not every investor needs a line. Compare the options.

A cash-out refinance on a rental tops out around 75% LTV on standard rentals, with about 6 months of seasoning as the common expectation. Credit expectations vary: a 620 floor exists in parts of the network, most programs want around 660, and 700+ unlocks the strongest leverage tiers.

If the equity sits in a property held by an LLC, the line is off the table. A DSCR cash-out refinance fits better. The complete DSCR loans guide covers the loan side in depth. For the line side, see how a bank statement HELOC works.

Next Step

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. The HELOC side runs in 16 states. Programs change, and every file is underwritten individually.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage broker. Home equity lines of credit — on a primary residence, a second home or an investment property — are arranged through wholesale lenders in Lendmire’s 16 full-service states, and every line is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. Yahoo Finance – Using a HELOC for a down payment

2. Benzinga – HELOCs on investment properties

3. CFPB

4. Nasdaq/SmartAsset – How to use a HELOC for a down payment