Banks That Offer a Bank Statement HELOC to Buy a House With Your Current Home’s Equity

The Quick Read: Most big retail banks document income the traditional way, so bank statement lines come mainly from non-bank and specialty lenders, often reached through a broker. The cash can go toward the down payment on your next house, because lenders generally do not restrict how line funds are used. What decides the outcome is your income documentation, your combined loan-to-value, and how the purchase lender treats the draw.

• A bank statement HELOC is an income-documentation method, not a different use of the money.
• Lines on an investment property cap at 70% combined loan-to-value in Lendmire’s network, while primary-residence lines can reach higher tiers, so drawing on your own home may give more room.
• At least 75% of the line is drawn at closing, so size it to the down payment you need.
• A line draws on equity. It does not replace the rental coverage the new property still has to show.
• Availability is limited to 16 states, narrower than the DSCR footprint.

What a Bank Statement HELOC Actually Is

A home equity line of credit (HELOC) is a revolving credit line secured by your home. You borrow against your equity, which is the home’s value minus what you owe. A “bank statement” HELOC changes only how the lender measures your income.

Instead of W-2s and tax returns, a self-employed borrower supplies months of personal or business bank statements. Scotsman Guide describes the standard setup as 12 to 24 months of statements. The lender estimates income from deposits, often applying an expense factor to business accounts. Scotsman’s example used 50%. That article is older, so treat the figure as an illustration, not a current standard.

This is a different file, not a lighter one. Credit, equity, and the home still get reviewed. Deposits are screened too, because transfers, refunds, and loan proceeds are not income.

Lendmire is a mortgage broker, not a lender. It places HELOC files with select wholesale lenders. Those lenders also measure your debt against your income, using a debt-to-income ratio. Exact income-calculation details vary by lender and file, so confirm them before you plan around them. Lendmire’s piece Banks That Offer a Bank Statement HELOC for First-Time Investors Tapping Home Equity covers the first-purchase angle.

Do Banks Actually Offer It?

Some do, but they are the exception. Large retail banks usually run HELOCs through full traditional income review. A self-employed borrower whose tax returns show low income may have a harder time qualifying there. Bank statement lines come mostly from specialty lenders.

Naming institutions would not help you, because availability and terms change and every file is judged on its own. The better question is which type of lender fits your situation.

A broker’s value is matching. The best program for your situation depends on your property type, credit, leverage need, and income documentation. A broker can compare several wholesale lenders against your file, so you do not take a separate hard inquiry at each one.

How Underwriting Treats the Line, Step by Step

Step 1: Income. The lender reviews your documented income. In the programs Lendmire places, the debt-to-income ceiling is 50%. It drops to 45% for credit profiles from 600 to 679, and a ratio above 45% needs a 680 score. The payment used to qualify is the interest-only payment on the maximum draw.

Step 2: Credit. The program floor is 600. The score comes from a single bureau, keyed to the primary wage earner. The report can be no more than 90 days old at closing. Bankruptcy needs 4 years of seasoning from discharge or dismissal.

Step 3: Equity. The lender caps your combined loan-to-value (CLTV), which is your first mortgage plus the new line divided by the home’s value. The cap depends on occupancy and credit.

Step 4: Valuation. Lines at or below $500,000 ordinarily use an automated valuation, with no traditional appraisal. A full appraisal is required on every line above $500,000. You can also request one at any size.

Step 5: Property and title. Eligible collateral includes single-family homes, 2-4 units, PUDs, townhomes, and condos, including non-warrantable ones. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not eligible. Title must sit with you as an individual or in your revocable living trust.

What the Lines Look Like (Structures and Limits)

The network runs a standalone line in first or second lien position. A second-lien line leaves your existing first mortgage alone. A first-lien line replaces it.

Two draw structures exist on primary residences and second homes. The shorter-draw program pairs a 3-year interest-only draw with a 17-year repayment period. The second is a 5-year interest-only draw followed by a 25-year fully amortizing repayment. Investment lines use the 5-year structure only. Pricing floats through both periods and never converts to fixed, so your payment moves with the balance and the market. Line sizes run from $25,000 to $750,000.

The 90% ceiling exists only at a 720 or better profile. Lower scores step down the tiers. On a primary residence, 640+ allows 80% CLTV, 620+ allows 70%, and 600+ allows 60%. A line above $500,000 is for primary residences only. It needs a credit profile of 700 or better (720 on the longer-runway program), caps at 75% CLTV, and requires a full appraisal.

Turning the Draw Into a Down Payment

At least 75% of the line is drawn at closing. You pay on that balance from the start, so open a line sized to the down payment and closing costs you actually need. Do not open the biggest line you can get.

Run a modeled example with these inputs as assumptions. You own your primary home with a first mortgage equal to 55% of its value and a 720+ credit profile. At a 75% CLTV tier, the line cannot exceed 20% of the home’s value. At the 90% tier, room reaches 35%. Now say you buy a rental priced near your home’s value. A DSCR purchase typically lands at 75% to 80% LTV, which means 20% to 25% down before closing costs. The 75% tier may fall short. The 90% tier clears it.

Sequence matters:

1. Confirm the line’s income documentation, CLTV, and state availability first. 2. Open and fund the line before you make offers, so your purchase lender sees the cash as seasoned and documented. 3. Tell the purchase lender where the down payment came from. Under traditional underwriting, borrowed funds count toward debt-to-income. DSCR programs are reviewed differently, so ask the purchase lender how it treats the line before you draw. 4. Plan the payoff. The line has a draw period followed by a repayment period, and falling behind can cost you the home.

The new rental must also carry its own weight. As a general planning rule, the property should cash flow both its own mortgage and the line payment, because the line is a second obligation on your primary home.

Where the Rules Break

Turning the collateral home into a rental. A line on an owner-occupied home assumes you live there. The CFPB’s HELOC booklet notes that renting out the home may be prohibited under the line’s terms. Moving out and renting your old house can breach the agreement.

Selling the collateral home. The same booklet says you generally must pay the line off in full at sale. A down payment funded this way is not something you can leave outstanding if you sell soon.

Listed-for-sale properties. In NC, PA, TN, TX, and WA, a property listed for sale, or listed within the past 60 days, is ineligible.

Investment property collateral. Lines on a rental you already own top out at 70% CLTV, need 700 credit, and cap at $500,000.

LLC-owned property. LLCs, corporations, partnerships, and land or irrevocable trusts cannot hold title on these lines. A property already deeded to an LLC needs a vesting change, or a DSCR cash-out refinance instead, subject to lender program eligibility.

Texas homestead. A Texas primary residence caps at 80% CLTV, and a 12-day waiting period applies. Texas second homes and investment properties are non-homestead transactions.

Limits on borrowers. You can hold three lines at most. A borrower with more than 15 financed properties is not eligible.

Credit history. Foreclosure history splits by program on primary residences and second homes. One program seasons a foreclosure at 7 years and a deed-in-lieu, pre-foreclosure, or short sale at 4. The other declines the history regardless of age.

State coverage. The HELOC programs are available only in AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA. Tennessee shortens both draw structures, and New Mexico and Ohio apply credit-based CLTV caps.

Why a Rental Purchase Usually Moves to DSCR

A HELOC solves the down payment. It does not finance the property. For a pure rental purchase, most investors turn to a DSCR loan, an investor loan that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The ratio compares monthly rent to the full payment: principal, interest, taxes, insurance, and any HOA dues.

Here is how the pieces typically fit across Lendmire’s wholesale network:

• Purchase leverage: most files land at 75% to 80% LTV. Select programs reach 85% LTV (15% down) with roughly a 700+ score.
• Coverage: 1.00 is where many select programs start, and stronger ratios open better pricing and leverage. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
• Credit: a 620 floor exists in parts of the network. Most programs want around 660, and 700+ unlocks the strongest leverage tiers.
• Loan size: up to $3,000,000 on standard programs (smaller balances available through select lenders).
• Reserves: they vary by lender, leverage, loan size, and transaction type. Around 6 months of PITIA is common.

A bigger down payment shrinks the new loan and can lift the coverage ratio. It never erases leverage caps, credit floors, reserve rules, or property eligibility. The strongest files have both enough equity and enough rental coverage.

Clearing 1.00 is not the same as positive cash flow. The ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside it. Your HELOC payment sits outside the property’s numbers too, but it is still a monthly obligation.

DSCR investor loans cover 41 markets, including Washington, D.C. The HELOC programs are narrower, at 16 states. The complete DSCR loans guide walks through the purchase side.

Key Terms Defined

HELOC: a revolving credit line secured by your home, with a draw period followed by a repayment period.

CLTV: combined loan-to-value, meaning your first mortgage plus the new line, divided by the home’s value.

Bank statement income: an income estimate built from months of personal or business deposits instead of tax returns.

Draw period: the interest-only stretch when you can borrow from the line.

Lien position: whether the line sits first in line for repayment or behind another mortgage.

DSCR: debt service coverage ratio, meaning a property’s monthly rent divided by its full monthly payment.

PITIA: principal, interest, taxes, insurance, and association dues, the full monthly housing payment.

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. All figures are subject to lender guidelines and full file review. This is not a commitment to lend. Reach out at 828-256-2183 or through the quote request page.

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.

References

1. Scotsman Guide: Rev Up the Engine for Non-QM Lending

2. CFPB: What Is a Home Equity Line of Credit HELOC

3. CFPB: What You Should Know About Home Equity Lines of Credit