Banks That Offer a HELOC to Buy Another Property

The Quick Read: A home equity line of credit (HELOC) for buying another property usually comes from equity in your own home, and the banks that write it depend on whether the line sits on your primary residence, a second home, or an existing rental, because large banks favor primary-home lines while rental-secured lines come from a narrower pool of lenders. No list of banks stays accurate for long, so the useful question is which programs fit your file.

• Equity in your primary home is the most widely available collateral for this strategy.
• Lines secured by a rental come from fewer lenders and carry stricter terms.
• In Lendmire’s network, investment-property lines cap at 70% combined loan-to-value (CLTV).
• The lender funding the purchase decides separately whether borrowed money can serve as your down payment.
• A DSCR purchase loan looks at the new property’s rent, but the HELOC payment is still a real monthly cost to you.

Which Banks Offer a HELOC to Buy Another Property?

The banks that write this product depend on the collateral and your file. Big banks mostly lend against primary homes. Rental-secured lines come from a smaller group of community banks, credit unions, and specialty lenders. NerdWallet reports that not all lenders offer lines on investment properties and that terms run stricter when they do.

This article does not name institutions. Availability shifts by region, property use, and year, and a name that works for one borrower fails for the next. Lendmire is a mortgage broker, not a lender. It works with a network of wholesale HELOC lenders and matches your scenario to the programs that fit.

Brokers shop several wholesale programs at once. A single bank can only offer you its own. The right program for your situation turns on property type, credit profile, leverage need, and documents.

One availability note applies here. Lendmire’s HELOC programs run in 16 full-service states, which is narrower than its 41-market DSCR footprint, including Washington, D.C. Confirm your state first.

Two Collateral Paths, Two Different Files

Two structures both get called a HELOC to buy another property. Each puts different property at risk and gets underwritten differently.

Path one is a line on your primary home. The money goes toward the down payment on the new property. This is the more common route. If the new rental underperforms, your residence still secures the debt.

Path two is a line on a rental you already own. The rental secures the debt, so your residence is not on the hook. Experian notes that rental-secured lines carry stricter requirements, including higher credit scores, lower debt-to-income ratios, and stronger reserves.

The leverage ceilings differ sharply by occupancy. Within Lendmire’s network, an investment-property line caps at 70% CLTV. The rest of the network ceilings look like this:

The 90% tier exists only at a 720-or-better credit profile. Lower scores step down through 85%, 80%, and 70% on primary residences, and the floor for any primary-residence line is 600. Second homes floor at 640 and investment properties at 700. A line above $500,000 is for primary residences only, needs a 700 score or better (720 on the longer-runway structure), caps at 75% CLTV, and requires a full appraisal. Every figure sits subject to lender guidelines and full file review.

How Underwriting Treats the Line, Step by Step

Underwriting works like a chain with one link per question. Here is how a typical file moves.

1. The lender sets the collateral and the line size. A credit limit is a percentage of the home’s value minus what you still owe. The CFPB’s HELOC booklet shows this calculation with a 75% illustration. That figure is an example, not a market cap.

2. The lender checks your credit. Most programs in the network want about a 700 score for investment lines. Primary-home lines start lower, with a 600 floor in parts of the network.

3. The lender checks your debt load. The maximum debt-to-income ratio is 50%. It drops to 45% for scores from 600 to 679. The lender reviews your file on the interest-only payment calculated on the maximum draw, not on what you plan to borrow.

4. The lender values the home. Lines at or below $500,000 ordinarily run an automated valuation instead of a traditional appraisal. A higher CLTV may call for a second valuation, and you can request a full appraisal anyway.

5. The title gets reviewed. The borrower must hold title as an individual or in a revocable living trust.

6. You draw and move the money. The line is a standalone first or second lien. Two draw structures exist: three years interest-only with a 17-year repayment, or five years interest-only with a 25-year repayment. Investment lines use the five-year structure only. Pricing floats and never converts to fixed.

Your credit report must be no more than 90 days old at closing, and the network uses a single-bureau score keyed to the primary wage earner. A bankruptcy needs four years of seasoning from discharge or dismissal.

The Step Most Investors Miss: The Purchase Lender Has Its Own Rules

Getting the line approved is only half the job. The lender funding the purchase decides separately whether borrowed money counts toward your down payment. The bank that opened your line has no say in that decision.

Programs treat borrowed funds in different ways. A second lien taken out at closing against the new property is treated differently from documented funds that already sit in your account from a line on a different property. Confirm the borrowed-funds rule with your purchase lender before you draw. Do that before you make an offer.

On the purchase side, a DSCR loan is the usual tool for a pure rental. 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. The lender qualifies the file primarily on property-level rental income covering the payment, subject to lender guidelines. The ratio divides monthly rent by the monthly principal, interest, taxes, insurance, and any association dues (PITIA).

Typical purchase terms across the network:

• Most files land at 75%-80% LTV, which means 20%-25% down.
• Select high-leverage programs reach 85% LTV with roughly a 700+ score.
• A coverage ratio of 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted.
• Credit floors vary: 620 in parts of the network, around 660 on most programs, and 700+ for the strongest leverage tiers.
• Reserves commonly run about six months of PITIA and vary by lender, leverage, and loan size.

Clearing 1.00 does not mean the property produces positive cash flow. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation. The HELOC payment generally sits outside the DSCR ratio too, but you still pay it every month. A conventional loan would count that payment in your debt-to-income ratio. A DSCR loan does not, yet your bank account feels it either way.

For the full picture of how these loans qualify, see Lendmire’s complete DSCR loans guide.

Run the Equity Math

Say you own a primary home and your credit sits at 700 or above. The network tier for that profile is 75% CLTV on lines up to $750,000. Your first mortgage balance equals 60% of the home’s value.

The line can reach 15% of the home’s value, which is 75% minus 60%. Now say the rental you want to buy costs about the same as your home is worth. A purchase at 80% LTV needs a 20% down payment, which is 20% of that price. Your 15% line covers three-quarters of that down payment, and the remaining 5% has to come from savings. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.

This is a modeled illustration, not a quote. It also leaves out closing costs and reserves, which need their own funds. A home with a smaller mortgage balance has more room. A home at the same value with a larger balance may have no room at all.

Where the General Rule Breaks

Several edge cases change the answer. Know them before you apply.

Most of the line gets drawn at closing. The network requires at least 75% of the line to be drawn at closing, so you cannot open a large line and leave it untouched as a standby fund. Interest-only payments start on the drawn amount right away.

Title can end the file. An LLC, corporation, partnership, or irrevocable, blind, or land trust cannot hold title on these HELOCs. A property already deeded to an LLC needs a vesting change, or a DSCR cash-out refinance instead. DSCR loans can be made to an LLC, subject to lender program eligibility. This is the sharpest structural difference between the two products.

Property type can end the file. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not eligible for these lines. Single-family, 2-4 unit, PUD, townhome, and condominium properties qualify, including non-warrantable condos. For DSCR purchases, manufactured homes, log homes, and barndominiums are not offered in the network either.

Exposure caps apply. A borrower may hold three lines at most. An owner of more than 15 financed properties is not eligible. A growing portfolio can age out of this strategy.

The line can shrink. The CFPB’s current HELOC booklet warns that a lender can cut a credit line if the home’s value falls. It also says you generally must repay the line in full if you sell the home. A line that was part of your purchase plan can disappear if values dip.

The payment can step up. After the interest-only draw ends, the line amortizes over the repayment period, and the payment changes. Pricing floats the whole time. Stress-test your cash flow against both changes.

Key Terms Defined

HELOC: A revolving credit line secured by property that lets you borrow, repay, and borrow again during a draw period.

CLTV (combined loan-to-value): All loans secured by the property added together and divided by its value.

Draw period: The early years of the line when you can borrow and pay interest only.

Repayment period: The later years when you can no longer draw and the balance amortizes.

DSCR (debt service coverage ratio): The property’s monthly rent divided by its monthly PITIA.

Seasoning: The waiting period a lender wants between two events, such as money landing in your account and using it for a purchase.

What the Decision Looks Like in Practice

Several paths cover most investors.

You have strong home equity and a modest mortgage. A line on your primary home may fund the down payment. Check the purchase lender’s borrowed-funds rule first, and decide whether you can carry both payments if the rental sits vacant.

You already own a rental with equity. A rental-secured line keeps your residence out of the picture. The pool is smaller and the CLTV ceiling is lower, at 70% in the network. A DSCR cash-out refinance is the alternative. It tops out around 75% LTV across most of the network, with about six months of seasoning as the common expectation. For standard rentals the 75% figure applies, and short-term-rental collateral sits lower. Lendmire’s piece Banks That Offer an Investment Property HELOC on a Rental Held as a Long-Term Buy and Hold covers that angle. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.

Your property sits in another state from your lender. Location can limit which banks will write a rental-secured line.

The strongest files clear two tests: enough equity and enough rental coverage. A bigger down payment lowers the new loan’s payment and can lift the DSCR. It never erases leverage caps, credit floors, reserve rules, or property eligibility.

Before you apply, gather the following:

• Your first mortgage statement and a current estimate of home value.
• A credit profile at or above the tier you need.
• Proof of the title holder and vesting.
• A plan for the down payment, closing costs, and reserves as three separate pots.
• A written check on the purchase lender’s treatment of borrowed funds.

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 through select lenders in its wholesale network and does not lend directly. The illustrative calculator on this page can give a rough sense of the equity math before you talk to anyone.

About Lendmire

Lendmire, NMLS# 2371349, is a mortgage brokerage that arranges home equity lines of credit through wholesale lending partners in its 16 full-service states. Lines on primary residences, second homes and investment properties are each reviewed individually by the lender under the program’s occupancy, credit and combined-loan-to-value guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. NerdWallet

2. Experian

3. CFPB, HELOC booklet (2014 edition)

4. CFPB, HELOC booklet