Banks That Offer a Bank Statement HELOC as First Lien or Second Lien

The Quick Read: Large banks, community banks, and credit unions all write home equity lines, but a line qualified on deposits instead of tax returns comes mostly from specialty wholesale lenders, and each lender’s program sets the lien position, not the borrower. Lendmire is a mortgage broker, so it does not lend. It shops a network of wholesale HELOC lenders and matches the property, the equity, and the borrower’s income documentation to the right program.

• Lien position is a program feature. Some lines sit in second position behind your mortgage, and others take first position and pay that mortgage off.
• On an investment property, the network’s ceiling is 70% combined loan-to-value (CLTV), with a 700 minimum credit profile.
• The 90% CLTV ceiling exists only on primary residences and second homes, and only at a 720-or-better credit profile.
• Title must sit with an individual or a revocable living trust. An LLC cannot hold it.
• Bank statements document the income. Credit, equity, and the property are still fully underwritten.

Which Banks Offer a Bank Statement HELOC?

Few big banks do. Large retail lenders generally underwrite equity lines on tax returns and W-2s, so the bank-statement version lives mostly in the non-QM channel, which investors reach through brokers and wholesale lenders. Which lenders write this product depends on the property type, the lien position wanted, and the borrower’s credit. Wholesale non-bank lenders are the most likely source, community banks and credit unions are a secondary option, and large retail banks rarely offer it.

Local institutions can be an option for investors who already have a deposit relationship. BiggerPockets discussions of investors seeking lines on rentals point to small banks and credit unions as the likelier sources. That is anecdote, not a survey. Even those lenders usually lean on tax returns. A self-employed investor whose returns show heavy write-offs is the borrower the wholesale route was built for.

A broker adds comparison. Different wholesale programs set different leverage tiers, credit floors, and draw structures. Matching a scenario to the right one is the job.

Key Terms Defined

Lien position is where a loan ranks in claims against the property. A first lien gets paid first. A second lien waits behind it.

Combined loan-to-value (CLTV) is every loan on the property, existing plus the new line, divided by the property’s value.

Bank statement income is qualifying income calculated from 12 to 24 months of deposits, usually, instead of tax returns.

Expense factor is the share of business deposits the underwriter treats as operating cost rather than income. The lender sets it, not the borrower.

Non-QM describes loans that fall outside standard agency documentation rules. Income is still verified, only in a different way.

Draw period is the stretch when you can borrow against the line. A repayment period follows.

How Underwriting Treats a Bank Statement Line, Step by Step

A bank statement line changes the paperwork, not the scrutiny. Underwriting moves through the same stages as any equity line, and the income step is the only one that looks different.

1. Lien position is set first. A second-lien line sits behind a first mortgage that stays in place. A first-lien line must be the only loan on the property. That means the property is free and clear, or the line pays off the existing mortgage. The network’s lines are standalone products, though not every wholesale lender writes both positions.

2. Income is documented. The borrower supplies consecutive personal or business statements. Programs commonly look at 12 to 24 months, and the exact lookback varies. The underwriter strips out transfers between your own accounts, loan proceeds, refunds, and one-time deposits. Business accounts then get an expense factor. A CPA-prepared profit-and-loss statement can stand in for statements on some programs.

3. Everything else is reviewed. The network’s lines carry a 50% maximum debt-to-income ratio. That limit drops to 45% for credit profiles from 600 to 679, and a ratio above 45% requires at least a 680. The income test runs on the interest-only payment calculated at the maximum draw, not on what you plan to borrow.

4. Combined leverage is sized. Existing liens plus the new line are divided by value, and the result must fit the credit tier. The tier tables appear below.

5. Valuation runs. Lines at or below $500,000 ordinarily use an automated valuation instead of a traditional appraisal, though a higher CLTV may require a secondary valuation. Every line above $500,000 needs a full appraisal, and any borrower may request one.

6. Draws begin. At least 75% of the line is drawn at closing. Pricing floats through both the draw and repayment periods and never converts to fixed. The CFPB describes the general shape of an open-end line this way: borrow repeatedly during the draw period, then repay.

The 75% draw requirement matters for planning. This is not a dormant line you open for flexibility and leave untouched. A borrower who wants a small initial draw and a large reserve should price that gap before applying. After closing, the minimum subsequent draw is $1,000 on the longer-runway program, which is the one with a 5-year draw and 25-year repayment.

First Lien or Second Lien? The Decision That Shapes Everything

Keep a low first mortgage and you want a second lien. Carry a mortgage you would happily retire, or own the property outright, and a first-lien line becomes a real option. The choice changes what happens to your existing loan.

A first-lien line on a mortgaged rental pays off the old loan and replaces it. Investors who want to keep a low-balance first mortgage should request second position specifically. A BiggerPockets thread shows investors using a first-position line on a rental to pay off its mortgage, leaving the line as the only loan on the property.

Not every wholesale lender writes both positions. That is one reason a broker’s comparison helps.

What the Network’s Programs Look Like

Leverage on this product depends on occupancy, so no single ceiling describes it. Lendmire’s network is narrower than the usual HELOC marketing suggests, particularly for investors.

Those figures come from select wholesale-network guidelines and are subject to lender review. The network runs two programs. The longer-runway program offers a 5-year draw and 25-year repayment, while the higher-leverage program is the one built for the strongest credit tiers. Several details sit under the table.

On a primary residence, the 90% tier applies to lines up to $500,000 at 720 or better. A line above $500,000 is available only on a primary residence. It requires a credit profile of 700 or better (720 on the longer-runway program), it caps at 75% CLTV, and it needs a full appraisal.

Two draw structures exist on primary residences and second homes. One runs a 3-year interest-only draw followed by 17 years of amortizing repayment. The other runs a 5-year draw followed by 25 years of repayment. Investment lines use the 5-year draw and 25-year repayment only.

Credit review is uniform across the network. The score is a single-bureau score keyed to the primary wage earner, and the report can be no more than 90 days old at closing. A bankruptcy needs 4 years of seasoning from discharge or dismissal. 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 that history entirely. Investment files follow the 7-and-4-year path.

A borrower can hold at most three lines. A borrower owning more than 15 financed properties is not eligible. The $2,000,000 combined exposure cap applies on the higher-leverage program. The longer-runway program caps combined exposure at $750,000.

The product is available only 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, which covers 40 states plus Washington, D.C. A handful of states also add their own waiting periods, leverage caps, or listing restrictions.

Where the General Rule Breaks

The tables describe the usual case. These exceptions change the answer.

LLC-held property. An LLC, corporation, partnership, or irrevocable, blind, or land trust cannot hold title on this product. Only an individual or a revocable living trust can. A property already deeded to an LLC needs a vesting change or a different structure. A DSCR cash-out refinance is the usual alternative, since it qualifies primarily on property-level rental income covering the payment, subject to program terms.

Property type. Single-family, 2-4 units, PUDs, townhomes, and condominiums, including non-warrantable condos, are eligible. Two-to-four-unit properties require a 640 minimum on the longer-runway program. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agriculturally zoned properties are not offered.

Listed properties. In some states, a property listed for sale, or listed within the past 60 days, is ineligible.

Rental restrictions. Some equity line agreements prohibit renting the property. The CFPB’s HELOC booklet notes this. It also says a lender may reduce or freeze a line if the home’s value drops, and that a sale generally requires paying the line off in full. An investor planning to sell or refinance should read those terms before signing.

Co-owners and spouses. Every titled owner generally signs the lien. A spouse who is not on the loan adds no income.

Bank Statement Line, DSCR Cash-Out, or Neither?

This product is borrower-based. It is reviewed on the borrower’s documented income and credit, not on the rent. A DSCR loan is the reverse. It compares rent to the full monthly obligation (principal, interest, taxes, insurance, and any HOA dues). The complete DSCR loans guide covers that math in detail.

Each fits a different investor:

• Self-employed, keeping a low first mortgage: a second-lien bank statement line gives equity access without replacing the existing loan, with the 70% investment ceiling in mind.
• Property in an LLC, or a larger balance: DSCR cash-out usually fits better. On standard rentals it tops out around 75% LTV, with roughly 6 months of seasoning common. Many select programs start at 1.00 coverage. A separate select-lender path goes below 1.00, with leverage and terms adjusted.
• Several financed properties: the line’s three-line limit and 15-property cap may bind long before a DSCR structure does.

A DSCR ratio above 1.00 does not mean a property cash-flows. It compares rent to the payment only. Repairs, vacancy, management, and capex sit outside it, so run those separately.

A fuller explanation of the line itself is in how a bank statement HELOC works.

Comparing Your Options

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 site’s illustrative calculator can give a rough sense of structure before a file is reviewed.

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. BiggerPockets – HELOC on an investment property

2. CFPB

3. BiggerPockets – HELOC 1st lien position

4. CFPB – HELOC consumer booklet