The Quick Read: You get one from non-bank and portfolio lenders, usually through a mortgage broker, because large retail lenders rarely offer a line that is reviewed around bank deposits instead of tax returns. The line sits in second position behind your first mortgage, so your existing loan keeps its balance, term, and payment. Lendmire is a broker that places these files with select wholesale lenders and matches the property and the borrower to the program that fits.
- The line is a revolving second lien. You draw what you need and pay on what you draw.
- Qualification runs on you: 12 to 24 months of deposits, credit, debt-to-income, and equity left after the first mortgage.
- On an investment property, the network ceiling is 70% combined loan-to-value (CLTV), with a 700 minimum credit profile and a line of up to $500,000.
- Title must sit with you personally or in a revocable living trust. An LLC-owned rental does not fit.
- Through Lendmire, this product is available in 16 states, which is narrower than its DSCR footprint.
What Is a Bank Statement HELOC?
A bank statement HELOC is a home equity line of credit that verifies your income from bank deposits instead of tax returns. It is built for self-employed owners whose taxable income looks small after write-offs. A conventional HELOC asks for pay stubs, W-2s, or returns. This one reads your account activity.
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.
The word HELOC means the same thing it always does. It is a revolving credit line secured by property, and the lender sets a limit based on your equity. It is not a lump-sum second mortgage. A closed-end second pays out once and amortizes on a fixed schedule. A line stays open, you draw as needed, and the balance moves up and down.
Bank statement qualification is not the same as no documentation. The lender still pulls credit, verifies the property, and checks your debt load. You are documenting income in a different way. Under this method, the loan is reviewed on documented income under the applicable program, subject to lender guidelines.
Where Do You Actually Get One?
You get one from non-bank lenders and some portfolio lenders, and the easiest route is a broker who can compare several of them. Large retail lenders mostly sit this product out. The deposit-based second lien is a niche, and the lenders who write it tend to sell through wholesale channels.
Here is how the channels line up. This table names categories only. Which one fits depends on your property, your credit, and how much leverage you need.
| Channel | Typical fit | What to ask |
|---|---|---|
| Big banks | Salaried borrowers, full documentation | Is any deposit-based option offered? |
| Credit unions | Members with standard documentation | Do you accept investment properties? |
| Portfolio lenders | Local or relationship-based files | What property types and titles do you accept? |
| Broker with wholesale network | Self-employed borrowers, investment property | Which programs match my occupancy and CLTV? |
A broker’s value here is comparison. Each lender sets its own ceilings on credit, line size, property type, and draws. Lendmire does not lend. It works with wholesale lenders whose programs differ, and it places the file with the one whose guidelines fit your scenario. The lenders that write this product vary, so the right program depends on your property type, credit profile, leverage need, and documentation.
How a Second Lien Sits Behind Your First Mortgage
Your first mortgage stays exactly as it is. The new line records behind it in second position, which means the first lender gets paid first if the property is ever sold or foreclosed. That order is what lets you keep a first mortgage you like.
This table shows what stays and what changes.
| Item | First mortgage | New line |
|---|---|---|
| Balance and term | Unchanged | New, separate |
| Monthly payment | Unchanged | Added on what you draw |
| Lien position | First | Second |
| Pricing | Stays as written | Floats, never converts to fixed |
One structural note. The network also writes these lines in first-lien position, but that is a different transaction. A first-lien line pays off the old mortgage. If your goal is to preserve the first loan, you want the second-position version.
Here is the catch. A second lien adds friction to a later refinance. If you want to replace your first mortgage down the road, the new first lender generally needs the line’s lender to agree to stay behind it, or you pay the line off. Plan for that before you open one.
How Underwriting Treats the File, Step by Step
Underwriting is a full review of you and the property. Here is the sequence.
Step one: the lender sizes your equity. Equity is value minus what you owe on the first mortgage. The CFPB’s HELOC booklet describes the same logic that lenders use for limits: a percentage of appraised value, minus the mortgage balance. The ceiling you are measured against is CLTV, which adds your first mortgage balance and the new line, then divides by value.
Say your first mortgage sits at 50% of the property’s value and the line is on an investment property. Whatever room remains under that property’s ceiling is the most the line can take, before credit tier and line-size limits trim it further. The calculator on this page shows how those percentages convert to dollars as an illustrative estimate.
Step two: the lender reads your deposits. It looks at 12 to 24 months of personal or business statements. It does not simply add them up. Transfers between your own accounts and loan proceeds come out. Business deposits usually get an expense factor, because not every dollar that lands in a business account is income.
Step three: credit. The lowest credit profile the network accepts is 600, and that floor applies to primary residences only. Second homes start at 640, and investment lines start at 700. Programs use a single-bureau score tied to the primary wage earner. The report can be no more than 90 days old at closing, and rescores are not allowed.
Step four: debt-to-income. The maximum ratio is 50%. It drops to 45% for credit profiles from 600 to 679, and a ratio above 45% requires a 680 minimum. The lender reviews your file on the interest-only payment calculated as if you had drawn the maximum line. Your first mortgage payment counts in that ratio.
Step five: valuation. Lines at or below $500,000 ordinarily use an automated valuation with no traditional appraisal, though a higher CLTV may require a second valuation. Every line above $500,000 needs a full appraisal. You can also request a full appraisal on any line.
Step six: draw and repayment. At least 75% of the line is drawn at closing on both wholesale programs. After closing, you can draw on the remaining balance as you need it and pay on what you have drawn. Pricing on the line floats and never converts to fixed, unlike your first mortgage, whose pricing stays as written.
Worked Example: How Deposits Become Income
Run the logic on a self-employed consultant with twelve months of business statements. The lender starts with total deposits. It removes transfers from the owner’s other accounts, refunds, and loan proceeds. It applies an expense factor to what remains, then divides by the number of months. The result is monthly qualifying income, and it is often well below the deposit total.
That gap catches borrowers off guard. A year of strong deposits does not mean the same qualifying income. A business with heavy costs flowing through the account sees a larger haircut. Cleaner, more consistent deposits make the file easier to read, and an account that mixes personal and business spending slows the analysis.
What the Network Allows, by Occupancy
The ceiling depends on how the property is used, so no single number applies to every borrower. This table shows the network ranges. Each is subject to lender guidelines and full file review.
| Occupancy | Minimum credit | Top CLTV | Max line |
|---|---|---|---|
| Primary residence | 600 | 90% at 720+ | $500,000 at 90% CLTV; $750,000 at 75% CLTV, 700+ (720 on the longer-runway program) |
| Second home | 640 | 90% at 720+ | $500,000 |
| Investment property | 700 | 70% | $500,000 |
The 90% figure exists only at a 720-or-better credit profile, and only on a primary residence or second home. On those, lines up to $500,000 can reach it. On a primary residence, a line above $500,000 caps at 75% CLTV, needs a full appraisal, and requires a credit profile of 700 or better (720 on the longer-runway program, covered below).
On an investment property, nothing sits above 70%. That is the number to plan around if you are borrowing against a rental. Market surveys sometimes report higher ceilings for equity lines, but those describe the broader market, and the network figure is the one that applies here.
Two wholesale programs sit behind these ranges, and they differ in structure. Both offer a line in first or second position, but their draw periods and fine print differ. The first, which this article calls the higher-leverage program, allows combined exposure of up to $2,000,000 across a borrower’s lines. The second, which this article calls the longer-runway program, caps combined exposure at $750,000 and sets its own tradeline and housing-history standards.
The draw structures work like this. Primary residences and second homes can take a 3-year interest-only draw followed by a 17-year repayment, or a 5-year draw followed by a 25-year repayment. Investment lines run the 5-year draw and 25-year repayment structure only. Pricing floats across both the draw and repayment periods and never converts to fixed. The floating payment has to fit your cash flow, which is one reason borrowers test it before they draw.
Where the Rules Break: Edge Cases
Title. Fee simple or leasehold title must be held by you personally or by an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. This is the sharpest difference from a DSCR loan. If your rental already sits inside an LLC, you need a vesting change or a DSCR cash-out refinance instead, subject to lender program eligibility.
Property type. Eligible properties include single-family homes, 2-4 units (a 640 minimum on the longer-runway program), PUDs, townhomes, and condominiums, including non-warrantable ones. Modular factory-built homes are eligible on the longer-runway program only. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural zoning are not offered.
Portfolio size. A borrower can hold at most three lines. A borrower with more than 15 financed properties is not eligible.
Past credit events. A bankruptcy needs 4 years of seasoning from discharge or dismissal on both programs, the higher-leverage program and the longer-runway program. Foreclosure history splits between them. On primary residences and second homes, one of the two seasons a foreclosure at 7 years and a deed-in-lieu, pre-foreclosure, or short sale at 4, while the other declines that history entirely regardless of age. Which program applies depends on how your file is matched, so confirm it before you apply. Investment files follow the 7-and-4-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.
Lower credit. Profiles under 640 are limited to single-family residences with a clean 12-month housing history. Because second homes floor at 640 and investment at 700, that restriction reaches primary residences only.
Home value drops. The CFPB’s HELOC explainer notes that a lender may stop further draws if the home’s value falls significantly. Treat the line as available credit, not guaranteed credit.
Short business history. Fewer programs fit a business under two years old or a short self-employment record. That is a matching problem more than a rule, and it is where comparing programs matters.
Rental restrictions. Some consumer HELOC contracts restrict renting the home out. Read the terms on a primary-residence line before leasing a unit.
Bank Statement HELOC vs. DSCR Cash-Out vs. Conventional HELOC
These three tools solve different problems. The bank statement HELOC underwrites you. A DSCR cash-out refinance reviews the property’s rental income. A conventional HELOC underwrites you using standard income documents.
| Factor | Bank statement HELOC | DSCR cash-out | Conventional HELOC |
|---|---|---|---|
| Reviewed on | Your deposits | Property rent vs. PITIA | Pay stubs, returns |
| Your first mortgage | Stays in place | Replaced | Stays in place |
| Title | Individual or revocable trust | LLC possible, per program | Individual, usually |
| Product | Revolving line | Lump sum | Revolving line |
DSCR loans are designed for non-owner-occupied investment properties. Because they are business-purpose investor loans, they are reviewed differently from a standard owner-occupied mortgage. DSCR compares rent to the full monthly obligation of principal, interest, taxes, insurance, and any association dues. The complete DSCR loans guide explains that qualification path in detail.
Know what the ratio does and does not say. Clearing a DSCR floor is not the same as positive cash flow. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. Where a program uses a 1.00 floor, it is a floor for that program, not a standard, and stronger coverage opens better pricing and leverage. Sub-1.00 coverage is available through select lenders in the network, with leverage and terms adjusted. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
On leverage, the two paths differ. A DSCR cash-out refinance tops out around 75% LTV on standard rentals and 70% on short-term-rental collateral, with about six months of seasoning as the common expectation. A bank statement line on an investment property tops out at 70% CLTV. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
So the decision turns on your goal. If you want to keep a first mortgage and your income is documented through deposits, the line fits. If the property sits in an LLC, or you want the rent to carry the file, a DSCR cash-out is the cleaner tool.
One more difference matters. A line is typically variable, while a lump-sum home equity loan typically carries fixed pricing. A line’s quoted cost can also reflect interest only and leave out points and other charges. Ask each lender for the full list of fees, not only the headline figure.
What to Gather and How to Shop
Pull your documents together before you talk to anyone. A prepared file makes program matching faster to evaluate.
- Twelve to 24 months of personal or business bank statements.
- Proof you own the business and how long you have run it.
- Your current first mortgage statement.
- A property insurance declaration and proof of title in your name or revocable trust.
- A government ID and authorization for a credit pull.
Then follow this order.
1. Confirm title. If an LLC holds the property, solve that first. 2. Estimate CLTV using the occupancy ceiling, not a general number. 3. Decide your line size, remembering that investment lines top out at $500,000. 4. Ask a broker to compare programs on credit tier, valuation, and draw structure. 5. Confirm availability. Lendmire places this product in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA.
If you are declined, the reason usually points to a fix or a different tool. A credit profile under a tier threshold can move after payoff or seasoning. Thin equity may suit a smaller line or a DSCR cash-out. Title in an LLC points to a vesting change. A first mortgage that already uses most of the 70% investment ceiling leaves little room, and a DSCR file may suit that property better.
Key Terms Defined
CLTV (combined loan-to-value): Your first mortgage balance plus the new line, divided by the property’s value.
Junior lien: A loan secured by the property that sits behind another loan in repayment order.
Draw period: The stretch when you can borrow from the line, often paying interest only.
Expense factor: A percentage a lender removes from business deposits to estimate what you keep as income.
DSCR: Debt service coverage ratio, which compares a rental’s income to its full monthly housing obligation.
Vesting: The legal name or entity that holds title to the property.
Frequently Asked Questions
Can I get a bank statement HELOC on a rental property I own?
Yes, through select wholesale lenders, with tighter terms than on a home you live in. The network ceiling on an investment property is 70% CLTV, with a 700 minimum credit profile and a maximum line of $500,000. Title must be in your name or a revocable living trust, and the loan is subject to lender guidelines and full file review.
Will the line change my existing first mortgage?
No, not when the line sits in second position. Your first loan keeps its balance, term, and payment. The trade-off shows up later. A future refinance of the first mortgage generally needs the line’s lender to agree to stay behind the new loan, or you pay the line off.
Do I need an appraisal?
Often not. Lines at or below $500,000 ordinarily run an automated valuation, though a higher CLTV may require a second valuation. Every line above $500,000 requires a full appraisal, and you can request one on any line.
Can an LLC borrow on a bank statement HELOC?
No. Title must be held by you or by a revocable living trust. If your property is already in an LLC, a vesting change or a DSCR cash-out refinance, subject to lender program eligibility, is the usual alternative.
Is a bank statement HELOC the same as a DSCR loan?
No. A bank statement line is reviewed around your deposits, credit, and debt-to-income. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Which tool fits depends on your title, your goal, and whether you want to keep the first mortgage.
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. Call 828-256-2183 or request a quote. For a deeper look at the product itself, read Lendmire’s page on the bank statement HELOC that keeps your existing mortgage.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving homeowners and real estate investors in its 16 full-service states. Home equity lines of credit are arranged through wholesale lending channels; Lendmire brokers the line and the lender underwrites each application under its occupancy-based guidelines. 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
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Banks That Offer a Bank Statement HELOC When the First Mortgage Is in Your Spouse’s Name
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.