The Quick Read: On a tower with a commercial floor, the best fit is usually not a home equity line at all, because the wholesale equity-line programs Lendmire works with do not offer commercial or mixed-use property, so the realistic routes are a DSCR cash-out refinance or a line on a different, eligible property, subject to lender guidelines. The building is screened before you are. Your credit and title matter only if the building passes.
- A commercial floor is a building-level flag, so it can stop a line no matter how strong your credit is.
- On an investment property, the network’s equity lines top out at 70% CLTV (combined loan-to-value, meaning all liens added together against the property’s value) with a 700 minimum score.
- A DSCR cash-out refinance qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. It does not depend on the equity-line property rules.
- Condo-building problems still matter on the DSCR side, so check the building before you apply.
What Does a Commercial Floor Do to a HELOC File?
It changes the property type. A HELOC (home equity line of credit, a revolving line secured by the property) is underwritten on a residential collateral screen. A residential condo unit passes that screen. A unit in a building with a retail, office, or other commercial floor often does not.
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.
Across the equity-line programs Lendmire places files with, condominiums are eligible, including non-warrantable ones. A non-warrantable condo is a project that fails standard agency-style building rules, such as heavy investor ownership, litigation, or low reserves. Commercial and mixed-use property, though, is on the not-offered list. A commercial floor is the exception to the general rule that a troubled condo building can still get a line.
That surprises many owners. They assume that if the unit is residential, the unit is what gets reviewed. The lender looks at the whole project instead. A unit in a building with a commercial floor is screened on the building.
Mixed-use is also a category, not a measurement. As National Condo Inspections puts it, hearing that a building is mixed-use tells you about a category rather than a size. Eight percent retail on the ground floor and forty percent commercial space are very different buildings. On these equity lines, though, the safe working assumption is that the presence of a commercial floor is enough to raise the flag. Confirm the exact test on your file before you plan around a percentage.
The Two Gates: You and the Building
Every condo line passes two separate reviews. The lender reviews you, and then it reviews the building. Failing either one ends the file.
| Gate | What is reviewed | What can stop the file |
|---|---|---|
| You | Credit score, debt-to-income, title, exposure | Score under 700 on an investment line, LLC title |
| The building | Declaration, budget, questionnaire, use mix | Commercial floor, condotel use, litigation |
The first gate is the one most investors prepare for. On an investment-property line, the network’s minimum credit score is 700. Debt-to-income (the share of your gross income that goes to debt payments) is capped at 50%. It is tested on the interest-only payment calculated on the maximum draw, not on what you plan to borrow.
Title is the sharpest personal rule. The line must be held by you individually or by a revocable living trust. An LLC, corporation, partnership, or land trust cannot hold title. A unit already deeded to an LLC needs a vesting change before the line can be opened, or you may want to look at a DSCR cash-out instead. Lender program eligibility decides the LLC question on the DSCR side.
The second gate is where tower owners get stuck. The documents that decide it are the condo declaration, the annual budget, and the lender’s condo questionnaire. The commercial share is a physical and legal fact set when the building is built and recorded in the declaration. No amount of credit strength changes it.
What an Investment-Property Line Looks Like When the Building Does Pass
Suppose your building has no commercial floor, or you own a unit in a different, residential-only building. Here is what an investment-property line looks like on this network.
- Ceiling: 70% CLTV on an investment property, with no higher tier.
- Credit: 700 minimum.
- Line size: up to $500,000 on an investment property.
- Structure: a 5-year interest-only draw, then a 25-year fully amortizing repayment. At least 75% of the line is drawn at closing. The rate floats and never converts to fixed.
- Valuation: lines at or below $500,000 ordinarily use an automated valuation. A full appraisal can be requested in any case.
- Exposure: a borrower is limited to three lines, and owning more than 15 financed properties makes you ineligible.
Primary residences and second homes follow different tables. Those can reach higher CLTV and larger lines, and a 90% ceiling exists only with a 720-or-better profile. Those figures never apply to a rental unit.
That 70% ceiling is also tighter than many people expect. NerdWallet notes that on an investment property you may have a smaller pool of lenders and borrow less than you could against your primary home, because lenders see the default risk as higher. The network’s investment tier fits that picture.
HELOC availability on this network is also narrower than the DSCR footprint. Equity lines run in 16 full-service states, while DSCR investor loans cover 40 states plus Washington, D.C. A building in a state outside those 16 will not get a line from Lendmire’s network regardless of its commercial share.
Where the General Rule Breaks
A few edge cases decide whether your file lands on the passing or failing side.
Share versus presence. An agency-style rulebook counts a percentage. A HELOC program built on a simple property-type screen may not. Do not assume a low commercial share rescues the file. A broker can ask the lender before you spend money on an appraisal or a questionnaire.
Non-warrantable is not the same as ineligible. A condo with high investor concentration or late dues can still get a line on this network, though each lender still weighs the building problems that made the project non-warrantable. The commercial floor is the exception. It is not weighed. It screens the building out.
Condotel or hotel use. A hotel or transient-use component in the tower is a separate exclusion. Condotels are not offered on these equity lines, even if the commercial floor is small.
Unit-level versus building-level. If you own a residential unit, the building is what gets screened. If you own the retail or commercial unit itself, you are in a different product family altogether. That is commercial collateral, and these equity-line programs do not offer it.
Title. A unit held in an LLC cannot take the equity line. A DSCR cash-out refinance is the alternative, subject to lender program eligibility.
How Is a Commercial Share Actually Measured?
When agency-style rules measure commercial space, the formula is simple. Take the total non-residential square footage and divide it by the total square footage of the project or building. Under the Fannie Mae Selling Guide, no more than 35% of a condo project or building may be commercial or mixed-use space, and the count includes commercial space above and below grade. It counts even when residential and commercial owners sit in separate associations.
Here is a simple illustration. Say a tower totals 600,000 square feet, and 90,000 of that is retail, office, and commercial parking. The commercial share is 15%. A tower with 240,000 commercial square feet out of 600,000 would be at 40%. These are modeled inputs, not data from any real building.
This is a contrast, not the rule for your loan. Agency limits govern agency loans. Lenders in the wholesale network apply their own guidelines. We do not have a single published commercial-share cap for these programs, so each lender reviews the building individually.
The 35% figure also explains why older articles disagree. The FHA condo limit was once 25%. HUD announced it raised the cap to 35% of total floor area for approved condo projects. Some consumer pages still circulate the old number. Neither figure applies to a rental HELOC. They matter only as context.
What “Best Program” Means for Your Situation
The best program for your situation depends on your title, your building, your equity, and what you want to do with the existing mortgage. Lendmire does not rank lenders. As a broker, it matches your scenario to the program that fits, across a wholesale network. Here is how that decision usually runs.
| Your situation | Usually fits |
|---|---|
| Residential-only building, personal or trust title, 700+ score | Investment-property line, up to 70% CLTV |
| Building has a commercial floor | DSCR cash-out, or a line on a different eligible property |
| Unit held in an LLC | DSCR cash-out, subject to lender program eligibility |
| Need more than $500,000 | DSCR cash-out |
| Want to keep a low-balance first mortgage | Line on an eligible property, since a line leaves the first mortgage in place |
The last row matters. A line sits beside your first mortgage. A cash-out refinance replaces it. If your first mortgage is one you want to keep, that structural difference can decide the question.
The DSCR Cash-Out Route
A DSCR cash-out refinance is the usual fallback for a tower with a commercial floor. DSCR (debt service coverage ratio) compares the property’s monthly rent to its monthly payment of principal, interest, taxes, insurance, and any HOA dues. 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 complete DSCR loans guide walks through the full process.
Typical ranges across the network look like this, subject to lender guidelines:
- Leverage: cash-out refinances on a standard rental top out around 75% LTV across most of the network.
- Seasoning: about 6 months of ownership is the common expectation.
- Coverage: 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger ratios open better pricing and leverage.
- Credit: a 620 floor exists in parts of the network. Most programs want around 660, and 700 or more unlocks the strongest leverage tiers.
- Loan size: up to $3,000,000 on standard programs (smaller balances available through select lenders), with 30-year fixed structures generally required above $2,500,000.
- Reserves: commonly around 6 months of PITIA (principal, interest, taxes, insurance, and association dues). They vary by lender, leverage, loan size, and transaction type.
Clearing 1.00 does not mean positive cash flow. DSCR counts rent against the payment only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.
A larger equity cushion also helps with leverage, but it never erases credit floors, reserve rules, or property eligibility. The strongest files clear both tests. They have enough equity and enough rental coverage.
DSCR is not a free pass on the building. The same tower with a commercial floor still goes through a project review. Condo buildings with heavy investor ownership often fail many DSCR programs. A broker who sees many lenders’ overlays can tell you which ones read a commercial floor more flexibly.
In practice, files like this one turn on the building documents more than on the borrower. A strong borrower in a messy building often has a harder file than an average borrower in a clean one. Getting the declaration and budget in hand early prevents late surprises.
A Pre-Application Checklist for the Building
Do this before you pay for anything.
1. Request the condo declaration and find the section that describes unit types and uses.
2. Ask the management company for the current annual budget and the reserve balance.
3. Request the lender condo questionnaire, which asks about commercial space, litigation, and delinquent dues.
4. Ask whether the building has any hotel, short-stay, or transient-use component.
5. Confirm how the unit is titled today, and whether an LLC holds it.
6. Ask a broker to test the building against the property-type screen before you order a valuation.
The condo-building risks that stack with a commercial floor include litigation, thin reserves, and delinquent dues. They also affect valuation confidence, which matters when you are borrowing against equity.
If the Building Does Not Pass
You have three practical options. First, move to a DSCR cash-out refinance on the same unit, if the rental income and building review support it. Second, take a line on a different, eligible property you own, such as a single-family rental or a unit in a residential-only building. Third, wait and revisit if the building’s use mix changes, which is rare.
Tax treatment varies; consult a qualified professional before relying on any deduction.
Key Terms Defined
HELOC: A home equity line of credit, a revolving line secured by the property that you draw from and repay.
CLTV: Combined loan-to-value, the total of all liens on the property divided by its value.
Non-warrantable condo: A condo project that fails standard agency-style building rules, such as heavy investor ownership, litigation, or low reserves.
Mixed-use: A building that combines residential units with commercial space such as retail or office.
Commercial share: The non-residential square footage divided by the building’s total square footage.
DSCR: Debt service coverage ratio, monthly rent divided by the monthly payment on the property.
PITIA: Principal, interest, taxes, insurance, and association dues, the full monthly obligation on the property.
Frequently Asked Questions
Is there a set commercial-space limit for a HELOC on a condo?
No single published cap governs these lines. Agency loans use a 35% limit, but equity-line programs apply their own property-type screens. On this network, a commercial floor is treated as a mixed-use flag, so confirm the test on your specific file.
Does a non-warrantable condo block a HELOC?
Not by itself. Non-warrantable condos are eligible on this network, though the lender still weighs the issues that made the project non-warrantable. A commercial floor is the exception that screens the building out.
Can I get a HELOC if I own the retail unit?
Not on these programs. Commercial collateral is not offered. A DSCR or commercial financing structure is the alternative to explore.
Does it matter that the building is a high-rise?
Height matters less than use mix. A tall tower with only residential floors passes the property-type screen. The same tower with a commercial floor does not, and parking, amenity, or hotel space can complicate the count.
Can an LLC hold the title on a HELOC?
No. Title must be held by you individually or by a revocable living trust. An LLC-held unit needs a vesting change or a DSCR cash-out refinance, subject to lender program eligibility.
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. Lendmire is a mortgage broker, not a lender, so it matches the file to a wholesale lender that fits. When the building rules out a line, it can arrange a DSCR cash-out refinance as the next option. An illustrative calculator on this page can help you frame the numbers.
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.
Investors who want the broader program framework can review how DSCR loans work.
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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
1. National Condo Inspections, commercial space ratio
2. NerdWallet, can you get a HELOC on an investment property
3. Fannie Mae Selling Guide, ineligible projects
4. HUD press release on the FHA condo rule
This article is part of Lendmire’s HELOC & home equity loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Best Investment Property HELOC Program for a Rental Condo Second Lien · Best Investment Property HELOC Program on an Inherited Rental Property · Best Investment Property HELOC Program on a Condo With an HOA
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.