Banks That Offer an Investment Property HELOC With No Minimum Draw Requirement

The Quick Read: Through Lendmire’s wholesale network, an investment-property line requires at least 75% of the line to be drawn at closing, so a true no-minimum structure is not part of these programs. What you can expect is a small minimum on later draws. The exact terms depend on the program, the property, and how you hold title.

• On an investment property, the network ceiling is 70% combined loan-to-value (CLTV), with a 700 minimum credit score and a maximum line of $500,000.
• Investment lines use a 5-year interest-only draw period, then a 25-year fully amortizing repayment period.
• The borrower, or a revocable living trust, must hold title. An LLC cannot.
• Before you apply, ask about three separate minimums: the draw at closing, the floor on later draws, and any balance you must keep outstanding.

Which Banks Offer This? The Honest Answer

No honest article can hand you a list of banks with a guaranteed no-minimum investment line. Lendmire is a mortgage broker, not a lender, and it does not rank or name lenders. The lenders that write this product depend on your situation: property type, credit profile, how you hold title, and how much you need.

What a broker can do is show you how these programs actually work. Lendmire places equity lines through select wholesale partners, and the numbers below apply only within those programs. Availability is limited to Lendmire’s 16 full-service states. That is narrower than its 41-market DSCR footprint, which covers 40 states plus Washington, D.C.

Large retail lenders and depository institutions run their own credit agreements, and minimum-draw terms live in those documents. A phrase on a marketing page is not the term. The verification checklist in the final sections of this article shows how to find the real one.

What the Network’s Investment Line Actually Looks Like

Here is how an investment-property line is built across the wholesale programs Lendmire works with. Two programs sit behind the numbers. One is built around a longer runway for the borrower. The other is built around higher leverage. Where they differ, each figure below applies only to its own program.

The 700 score is a hard floor, and no tier sits beneath it. A 720 score and a 700 score both reach 70% CLTV, so credit above 700 buys eligibility, not extra leverage. A line above $500,000 is for primary residences only, so an investment line can never exceed that size.

Lines at or below $500,000 ordinarily run on an automated valuation rather than a traditional appraisal, and full appraisals are required only above $500,000. Because an investment line cannot exceed that size, it commonly closes without a traditional appraisal. A borrower may request a full appraisal in any case, and a higher CLTV may require a secondary valuation.

Debt-to-income (DTI) can run up to 50%. It is figured on the interest-only payment at the maximum draw.

Why the Draw at Closing Matters So Much

The required draw is the heart of this question. On both wholesale programs, at least 75% of the line is funded at closing, so you start paying interest on most of it immediately. A standby line works the other way: it costs little until you use it.

Picture an investor who wants a cushion for repairs and a future down payment but needs very little cash today. On a line with a large closing draw, interest runs on money that sits idle. On a true standby line, it would not. That difference is the whole reason investors search for no-minimum lines.

After closing, the longer-runway program states a minimum of $1,000 on each later draw, or $4,000 in Texas. The higher-leverage program does not state a subsequent-draw minimum. Confirm the figure for your file before you assume it.

The Three Kinds of “Minimum” (Know Which One You’re Asking About)

Most people use “minimum draw” to mean one thing. Lenders use it to mean three. The CFPB’s HELOC explainer says plans may require an initial amount at setup, a minimum each time you borrow (it gives $300 as an example), or a minimum balance kept outstanding.

A claim of no minimum draw often covers only the second row. A line can have no per-draw floor and still force a large draw at closing. On this network, the closing draw is the binding one for investment properties.

Interest accrues only on the drawn balance, per the same CFPB explainer. A forced draw is therefore a real carrying cost, not a technicality.

How Underwriting Treats a Rental-Collateral Line

Underwriting a line on a rental is different from underwriting a DSCR loan. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. An equity line leans on you.

Step by step, the review typically goes like this:

1. Equity check. The lender takes the property value, applies the maximum CLTV (70% on an investment property here), and subtracts existing liens. What remains is the room for a line.

2. Credit. A 700 score is the hard floor on investment lines. The score comes from a single-bureau model keyed to the primary wage earner, and the report must be no more than 90 days old at closing.

3. Housing and tradeline history. Standards vary by program. The longer-runway program wants two tradelines seasoned 12 months or one seasoned 24, with a clean mortgage payment history across all financed properties.

4. DTI. The lender reviews your file on the interest-only payment at the maximum draw, up to 50%.

5. Valuation. Typically an automated valuation, as covered above.

6. Title. The lender confirms who holds the deed.

This is the same pattern NerdWallet’s investment-property HELOC explainer describes. It says not every lender offers one, the lender pool is smaller, and you typically can’t borrow as much as against a primary home.

Where the General Rule Breaks

Several edge cases change the answer.

LLC-owned rentals. This is the sharpest difference from a DSCR loan. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title on these lines. Individuals and inter vivos revocable living trusts can. If your rental is already deeded to an LLC, you need a vesting change or a DSCR cash-out refinance instead. A DSCR loan to an LLC is possible subject to lender program eligibility.

Property type. Single-family, 2-4 units, PUDs, townhomes, and condominiums, including non-warrantable condos, are eligible. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not offered on either program.

Portfolio size. A borrower is limited to three lines. A borrower with more than 15 financed properties is not eligible. Combined exposure across those lines is also capped, and the cap differs by program, so ask the broker which program your file would fall under and have the figure confirmed in writing before you plan a multi-property strategy.

Credit events. A bankruptcy needs four years of seasoning from discharge or dismissal. On investment files, a foreclosure follows a seven-year path. A deed-in-lieu, pre-foreclosure, or short sale follows a four-year path.

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 also limits properties to 10 acres.

Interest-only and balloon risk. BiggerPockets’ HELOC explainer notes that payments can be interest-only while the line is open. Some plans end in a balloon payment rather than converting to amortization. On this network’s investment line, the 25-year repayment amortizes fully, but your payment still steps up when the draw period ends.

How to Verify a Draw Rule Before You Apply

A broker can shop several wholesale programs. If you deal directly with a lender, you need to verify the draw rule yourself. Here is how.

Start with the written disclosures. Under 12 CFR 1026.40, a creditor must disclose any minimum draw requirement, any minimum outstanding balance, and limits on the number or size of draws. The disclosures come when you are given the application. That rule is written for consumer credit, and business-purpose credit is generally treated differently. On an investor line, ask the lender for the same terms in writing, whatever format it uses.

Ask these questions, in this wording:

1. What percentage of the line must I draw at closing?

2. What is the smallest later draw I can take?

3. Must I keep a balance, or can I pay it to zero?

4. Does the line allow a first or second lien, and does my property type qualify?

5. Can the lender freeze or reduce an unused line?

6. Must the borrower on title be an individual or a trust?

If the answer to the first question is “none,” get it in writing. If the answer is “it depends on the amount,” ask for the number that applies to your file.

When a Required-Draw Line Is Still the Right Tool

A required draw is not a flaw if you needed the cash anyway. Say you own a rental with solid equity and want most of it for a down payment on the next property. A line drawn largely at closing works much like a second-lien term loan, with interest-only payments for five years.

It is a poorer fit if you want standby capital, since most of the line is funded and accruing interest from day one. In that case a DSCR cash-out refinance may be worth comparing. Lendmire’s piece Banks That Offer an Investment Property HELOC With the Longest Possible Draw Period covers how draw length shapes the carry.

HELOC or DSCR Cash-Out? A Quick Comparison

On a DSCR cash-out, about 6 months of seasoning is the common expectation, and 75% is the usual network ceiling on a standard rental. A short-term rental cash-out tops out at 70%. Coverage of 1.00 is where 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.

One caution: clearing 1.00 is not the same as positive cash flow. DSCR compares rent to the full monthly housing payment only. Repairs, vacancy, management, and utilities sit outside it. Lendmire’s complete DSCR loans guide walks through the full calculation.

Key Terms Defined

• CLTV (combined loan-to-value): Your total debt on the property, including the new line, divided by the property’s value.
• Draw period: The stretch when you can borrow from the line, paying interest only on this network’s investment lines.
• Repayment period: The stretch after the draw ends, when you pay down principal and interest.
• Initial draw: The amount funded at closing, at least 75% of the line on this network.
• Subsequent draw: Any advance you take after closing.
• Vesting: How title is held, such as an individual, a revocable trust, or an LLC.

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. Lendmire arranges financing as a broker through select wholesale lenders. Qualification is subject to lender guidelines and is not a commitment to lend.

An investor with a rental held in their own name, a 700-plus score, and room under 70% CLTV is the file this structure fits, and the draw at closing is the first thing to price before anything else.

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. CFPB’s HELOC explainer

2. NerdWallet’s investment-property HELOC explainer

3. BiggerPockets’ HELOC explainer

4. eCFR – 12 CFR 1026.40