Banks That Offer a Bank Statement HELOC to Cover the Down Payment on Your Next Home

The Quick Read: Large retail banks rarely write these lines. Specialty lenders do, and a broker can shop several of them for one file. The line reads your deposits as income, and the draw can fund your next down payment, but the purchase lender decides whether borrowed money counts.

• On investment-property lines, the network Lendmire works with tops out at 70% CLTV and wants a 700 score. Primary-residence and second-home lines reach 90% CLTV only at 720 or better.
• At least 75% of the line is drawn at closing, so you start paying interest on most of it right away.
• Title must sit with you personally or in a revocable living trust. An LLC cannot hold it.
• Lendmire’s HELOC availability covers 16 states, narrower than its DSCR footprint.
• A line adds to your cash obligations even when the new rental’s coverage looks fine.

Who Actually Offers a Bank Statement HELOC?

Mostly specialty and non-QM lenders, not big banks. The product is a standard home equity line where the lender reads deposit history as the income evidence. It is not a separate regulated product. RenoFi notes that not all lenders offer one, and that matches what a broker sees day to day.

This page does not rank or name companies, and that is deliberate. The right lender depends on your property type, credit profile, leverage need, and how your income shows up in your accounts. A single bank’s product fits one kind of borrower and misses the rest.

A broker works the other way around. Lendmire is a mortgage broker, not a lender. It places HELOC files with select wholesale lenders in its network and matches your scenario to the program whose rules fit. The programs differ on credit floors, leverage, property types, and how they treat foreclosure history. Shopping several at once is the point.

Lendmire’s HELOC availability covers its 16 full-service states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA. Its DSCR investor programs cover 40 states plus Washington, D.C.

How Does a Bank Statement HELOC Work, Step by Step?

The lender totals your deposits over a set window and treats that as qualifying income. You still document your income, just through statements instead of tax returns. The exact window and any expense adjustment vary by program, and some lenders also ask for a profit-and-loss statement or proof of self-employment.

Here is the full path from equity to closing:

1. Pick the equity property. This is the home you already own. It secures the line, and the new purchase does not.

2. Check combined leverage. Lenders add your first mortgage balance and the new line, then divide by the home’s value. That is the CLTV.

3. Document income. You supply months of personal or business statements. The lender reviews credit and your debt-to-income ratio too.

4. Close the line. At least 75% of the line is drawn at closing. Later draws start at $1,000 on the program that states a subsequent-draw minimum.

5. Move the money. You send the draw to your closing account and keep the paper trail.

6. Close the purchase. The purchase lender reviews where your down payment came from.

The credit limit is a share of your home’s value minus what you owe. The CFPB’s guide to home equity lines describes this as an open-end line with a draw period followed by a repayment period. It also warns that you could lose the home if you fall behind.

Pricing on these lines floats through both the draw and repayment periods. It never converts to fixed. Plan for a payment that moves.

What Do the Network’s Programs Allow?

The ceiling depends on how the equity property is used. Never read one occupancy’s number as the limit for another. These ranges reflect select wholesale-network guidelines and are subject to lender guidelines and full file review.

Lower credit tiers step the ceiling down. A primary residence at 700 can reach 85% CLTV on a line up to $500,000, while a 620 profile sits at 70% on lines up to $400,000. Larger lines on a primary home, above $500,000, require 700 or better (720 on the 5-year-draw structure), cap at 75% CLTV, and need a full appraisal.

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

A few other rules shape most files:

• Debt-to-income. The ceiling is 50%, or 45% for scores from 600 to 679. The lender reviews your file on the interest-only payment at the maximum draw, not on what you plan to use.
• Valuation. Lines at or below $500,000 usually run an automated valuation. A higher CLTV may require a second valuation, and you can always ask for a full appraisal.
• Credit report. One score keyed to the primary wage earner, no more than 90 days old at closing, with no rescores.
• Past credit events. A bankruptcy needs 4 years of seasoning from discharge or dismissal. Foreclosure history splits by program, so this is where a broker earns the fee.

Which Property Can Secure the Line?

Your name or a revocable living trust must hold title. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot. This is the sharpest structural difference from a DSCR loan, which can be written to an LLC subject to program terms.

If your rental already sits in an LLC, you have two options. You can change the vesting, or you can skip the line and use a DSCR cash-out refinance, which is the usual alternative for entity-held property.

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 property are not eligible. Modular factory-built homes are eligible on the 5-year-draw structure only, and 2-4 unit properties on that structure need a 640 score.

A property listed for sale, or listed within the past 60 days, is ineligible in NC, PA, TN, TX, and WA. Three more limits catch investors who own many properties. A borrower can hold three lines at most. Combined exposure caps at $2,000,000 on the 3-year-draw structure and $750,000 on the 5-year structure. More than 15 financed properties makes you ineligible.

Will the Purchase Lender Accept Borrowed Down Payment Funds?

It depends on the purchase lender’s program, and you should ask before you draw. No outside rulebook sets one standard for how a purchase lender treats borrowed money. Many accept a documented line draw for the down payment and closing costs. Some limit it, and a few refuse it.

Lenders often treat three buckets separately: down payment, closing costs, and reserves. Borrowed money may be accepted for the first two and still not count as reserves. Reserves vary by lender, leverage, loan size, and transaction type, and they commonly sit around 6 months of PITIA. That is principal, interest, taxes, insurance, and any association dues.

Disclose the draw and document it. Do not park funds to hide where they came from. A clean paper trail from the line to the closing account is what keeps the file simple.

Purchase leverage runs on its own track. Most DSCR purchases land at 75%-80% LTV, which means 20%-25% down. Select programs reach 85% LTV, or 15% down, with roughly a 700-plus score. A larger down payment lowers the monthly payment and can lift the coverage ratio. It never erases leverage caps, credit floors, reserve rules, or property eligibility. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.

For the full qualification picture, see Lendmire’s complete DSCR loans guide.

What Does the Math Look Like in Practice?

Picture a self-employed owner with a 720 score and a primary home carrying a first mortgage. The owner wants a 25% down payment on a rental. The home’s value and the first mortgage together set how much line fits under the 90% ceiling, and the $500,000 line cap applies at that tier. The line may not reach 90% in practice, because the owner would only draw what the purchase needs. Leverage, reserves, and pricing vary by lender and program; the final terms follow the full file review.

The rental is then judged on its own. Say the lender sees rent covering the full monthly payment at roughly 1.15x. The purchase loan is judged mainly on that rent-to-payment test, not on the owner’s personal debt ratio. The HELOC is the opposite: it is a DTI-based approval.

Coverage of 1.00 is where many select programs start, not a universal standard. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. No-ratio structures are available only through select lenders, generally for borrowers who already own a primary residence.

Clearing 1.00 does not mean the property produces positive cash flow. The coverage ratio compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside it. Your HELOC payment sits outside it too, and your bank account feels every dollar of it.

Run a stress test before you close the line. Add the HELOC payment at full draw, the first mortgage, and the new loan payment. Subtract your realistic rent after vacancy and repairs. If the result only works when everything goes right, size the line smaller.

Where Do the General Rules Break?

These are the situations that surprise borrowers:

• Recent purchase or cash-out on the equity home. Seasoning on the source property can block a line. The waiting period varies by program, so ask before you plan your timeline.
• You want to use the line for the down payment but also need it for reserves. Borrowed funds may not count toward reserves, as covered above.
• Your credit history has a foreclosure. One program seasons a foreclosure at 7 years and a deed-in-lieu, pre-foreclosure, or short sale at 4. Investment files follow the 7-and-4-year path.
• The property type is excluded. Manufactured homes, log homes, and barndominiums are not offered on the DSCR side. Those property types fall outside the network’s programs entirely.
• You hold the equity property in an LLC. A cash-out refinance is the usual route.
• Early payoff on the new loan. DSCR loans can carry prepayment terms, so check the schedule before you plan a quick refinance out of the purchase loan.

Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.

Is This Strategy Right for You?

It fits when you have real equity, a documented income stream, and a rental that covers its own payment with room to spare. A CBS News report on using home equity for an investment property frames the test well: the investment’s cash-on-cash return should beat the cost of the borrowing.

Skip it, or shrink it, in these cases:

• You would borrow 100% of the down payment and have no cash left over.
• Your reserves are thin and the line would use your last cushion.
• A rising payment would strain your budget.
• You cannot comfortably risk the home that secures the line.

Lendmire’s piece Best Bank Statement HELOC Program to Cover the Down Payment on Your Next Home covers how to compare programs once you know the line makes sense.

Key Terms Defined

HELOC: A home equity line of credit, which lets you borrow against your home’s equity during a draw period and repay it afterward.

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

Bank statement income: Income a lender measures from your deposit history instead of tax returns, subject to lender guidelines.

Draw period: The stretch when you can borrow from the line, usually with interest-only payments.

DSCR: Debt service coverage ratio, which compares a rental’s monthly rent to its full monthly payment.

PITIA: Principal, interest, taxes, insurance, and any association dues, which together make the monthly obligation on a property.

Source of funds: The documented trail showing where your down payment money came from.

What Should You Do Next?

Start with the equity. Pull your first mortgage balance and a realistic home value, and check whether your title is in your name or a revocable trust. Then gather several months of statements and a current credit report.

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 terms are subject to lender guidelines and are not a commitment to lend. An illustrative calculator on this site can give you a rough estimate before you apply.

About Lendmire

Lendmire is a mortgage brokerage (NMLS# 2371349) arranging home equity lines of credit — primary-residence, second-home and investment-property lines — through a wholesale lending network in its 16 full-service states. Eligibility is determined by the lender on each file. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. RenoFi – Bank Statement HELOC

2. CFPB’s guide to home equity lines

3. IRS Publication 936 – Home Mortgage Interest Deduction

4. CBS News – home equity for investment property