Banks That Offer an Investment Property HELOC to Pay for Big Equipment Purchases

The Quick Read: An investment property HELOC is a revolving line secured by a rental’s equity, and you can spend the draws on equipment, but few banks write one and banks don’t market it as an equipment product. The lender underwrites you and the rental, not the machine, so approval turns on equity, credit, debt-to-income, and how the property is titled.

• The rental secures the line. The equipment you buy with it does not.
• Across Lendmire’s wholesale network, an investment-property line tops out at 70% CLTV, with a 700 minimum credit score and a $500,000 maximum line.
• Title must sit with you personally or in a revocable living trust. An LLC cannot hold title on these lines.
• Availability is limited to 16 states, which is narrower than the DSCR footprint.
• A DSCR cash-out refinance is the usual alternative when the property sits in an LLC or the line is too small.

What an Investment Property HELOC Actually Is

A HELOC on a rental lets you borrow against the property’s value and draw cash as you need it. NerdWallet compares it to a credit card with the property as collateral, and notes that not every lender offers it and that qualification is strict.

The line is a standalone loan that can be written in first or second lien position. When it sits in second position, your existing first mortgage can stay in place. A cash-out refinance replaces that mortgage. A HELOC in that setup adds a new lien behind it.

Equipment is a legitimate use in principle. The practical question is whether a lender will write the line at all on a non-owner-occupied property.

Which Banks Offer One? The Honest Answer

Few do, and nobody keeps a reliable current list. Lendmire is a mortgage broker, so this article does not name or rank banks. A bank’s appetite for rental-property lines changes often, and a list that was right last quarter can be wrong today.

Taxstra reports that most large national banks either skip investment-property HELOCs or restrict them heavily, and that portfolio lenders, credit unions, and regional banks are the usual sources. The category tells you more than the brand name does.

The best fit for your situation depends on the property type, your credit profile, how much leverage you need, and how the property is titled. A broker that shops several wholesale HELOC lenders can match the scenario to a program instead of sending you to apply to one bank at a time.

How Underwriting Treats the Line, Step by Step

1. Equity test. The lender sets a maximum combined loan-to-value, then subtracts your existing first mortgage. What remains is the most the line can be. If your first mortgage already uses 60% of the value and the cap is 70% CLTV, only 10 points of equity are available.

2. Credit pull. On the network’s investment lines, the minimum credit score is 700. The score model is a single-bureau pull keyed to the primary wage earner, the report must be no more than 90 days old at closing, and rescores are not available.

3. Debt-to-income. Maximum DTI is 50%. The lender reviews your file on the interest-only payment calculated on the maximum draw, not on what you plan to borrow. A large line that you intend to draw lightly still counts in full.

4. Valuation. A line at or below $500,000 ordinarily runs an automated valuation with no traditional appraisal. A higher CLTV may call for a secondary valuation, and you can ask for a full appraisal in any case. NerdWallet notes that multiple appraisals may be required at some lenders, so expect valuation rules to differ by lender.

5. Property and title review. The lender confirms the property type is eligible and that title is held in an eligible name.

6. Derogatory history. A bankruptcy needs 4 years of seasoning from discharge or dismissal. On investment files, a foreclosure needs 7 years. A deed-in-lieu, pre-foreclosure, or short sale needs 4.

Rent matters less here than on a DSCR loan. These lines underwrite the borrower first. The rental’s cash flow is a supporting factor.

What the Network’s Investment Line Looks Like

These are guideline ranges from select wholesale lenders, subject to lender guidelines and full file review. They are not a commitment to lend.

• Ceiling: 70% CLTV on an investment property, with a 700 minimum credit score. A score of 720 reaches the same 70% ceiling as a score of 700, so higher credit buys eligibility rather than more leverage.
• Line size: $25,000 to $500,000 on an investment property. Lines above $500,000 are available only on primary residences.
• Structure: a 5-year interest-only draw period, then a 25-year fully amortizing repayment period. The pricing floats through both periods and never converts to a fixed amount.
• Drawn at closing: at least 75% of the line. After closing, subsequent draws start at $1,000 ($4,000 in Texas).
• Property types: single-family, 2-4 units, PUDs, townhomes, and condominiums, including non-warrantable condos.
• Not eligible: manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural zoning.

On this network, an investment line stops at 70% CLTV. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.

What the Lender Sees When the Draw Is for Equipment

The lender does not underwrite the equipment. It does not ask what the machine is worth, and the equipment’s value does not add to what the rental can support. The line is secured by the real estate, and the equipment is simply what the draw pays for.

Three mechanics matter for an equipment buyer.

The 75% draw at closing. A single equipment purchase with a known price may suit a lump sum better than a revolving line. Since most of the line is drawn at closing, you carry interest on that balance from the start, whether or not the purchase is ready. Size the line to the purchase instead of taking the largest line the equity allows.

Floating pricing. The pricing floats and does not convert to fixed. That is a risk worth sizing when the line funds an asset that loses value.

Collateral mismatch. A machine that depreciates is paid for with debt secured by a rental. If the machine stops earning, the lien on the rental stays. The right test is whether the property could carry the line with no help from the equipment.

Where the General Rule Breaks

These are the edge cases that most often change the answer.

• LLC title. On these lines, LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. A property already deeded to an LLC needs a vesting change or a DSCR cash-out instead. An individual or an inter vivos revocable living trust can hold title.
• Three-line limit. A borrower can hold at most three of these lines. Combined exposure also has a cap, so a borrower who has already tapped other properties may hit the ceiling first.
• Portfolio size. A borrower who owns more than 15 financed properties is not eligible.
• Listed property. In Indiana, North Carolina, Pennsylvania, Tennessee, Texas, and Washington, a property that is listed for sale, or was listed within the past 60 days, is ineligible.
• State availability. The HELOC runs only in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA. DSCR financing covers 41 markets, including Washington, D.C., so a property outside the 16 states needs a different route.
• Texas. An investment property in Texas is treated as a non-homestead transaction. The one-lien-at-a-time rule and seasoning limits apply to primary residences only, and Texas properties are limited to 10 acres.
• Ineligible structures. Manufactured homes, log homes, and barndominiums are not offered. Neither is an equity line on a commercial or mixed-use building.
• Primary-residence workaround. Taxstra distinguishes a HELOC drawn on your own home from one on the rental. The primary-residence version is more widely offered, but it puts your home behind the debt for a business purchase.

HELOC, DSCR Cash-Out, or an Equipment Loan?

The three options fix different problems. A conventional bank line looks at your personal income. A DSCR cash-out qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.

On a standard rental, the DSCR cash-out ceiling is about 75% LTV, with roughly 6 months of seasoning typical. On short-term-rental collateral the cash-out ceiling drops to 70%. Coverage of 1.00 is where select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Clearing 1.00 does not mean positive cash flow, since repairs, vacancy, management, and utilities sit outside the calculation. Reserves vary by lender, leverage, and loan size, and commonly run around 6 months of PITIA.

A DSCR cash-out makes sense when the property is in an LLC, when the equipment need exceeds the HELOC’s $500,000 cap, or when personal DTI is the obstacle. It costs you the existing first mortgage, so weigh what you give up. A related piece covers how an investment-property line can fund business equipment. The full DSCR loans guide covers the loan side in more depth.

Reading Your Own File: Who Fits and Who Does Not

A line fits when the rental sits in your name or a revocable trust, your credit is 700 or better, your DTI clears 50% on the maximum draw, and the first mortgage leaves room under the 70% CLTV cap. Stack those conditions and the line is a clean fit.

A line does not fit when the property is in an LLC, the rental is a manufactured home, you already hold three of these lines, or you own more than 15 financed properties. In those cases, shop a DSCR cash-out instead.

Before you apply anywhere, gather these items:

• The current first-mortgage statement and the property’s estimated value.
• A recent credit report, kept inside the 90-day window.
• Title documents showing whether the property is held personally or in a trust.
• A list of other financed properties and any other lines you hold.
• A plain statement of what the draw will buy.

Then ask each lender these questions. Does it write non-owner-occupied lines? Does it restrict use of funds? Does it accept your title structure? How many rentals can you hold with it? Does it freeze or reduce lines? A lender that cannot answer in writing is not the right one.

Key Terms Defined

CLTV: Combined loan-to-value, the total of all liens divided by the property’s value.

Draw period: The stretch of the loan when you can borrow, here a 5-year interest-only period.

Repayment period: The stretch after the draw period when you repay principal and interest, here 25 years.

DTI: Debt-to-income, the share of your income that goes to debt payments.

Vesting: The legal name under which the property’s title is held.

Automated valuation: A computer-generated property value used in place of a traditional appraisal.

DSCR: Debt service coverage ratio, the property’s rent divided by its full monthly obligation (principal, interest, taxes, insurance).

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. Reach the team at 828-256-2183 or request a quote. An illustrative calculator on the site gives a rough estimate only. Pricing, terms, and eligibility come from the lender after full file review.

Equity in a rental is an asset to size carefully, because the line can fund the equipment but it is the property that carries the debt.

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. NerdWallet

2. Taxstra: HELOC on an Investment Property