The Quick Read: Only on an owner-occupied home. On a primary residence or second home, a line can reach 90% combined loan-to-value (CLTV) at a 720-or-better credit profile, which is above the 80% FHA cash-out ceiling. On an investment property, the network tops out at 70% CLTV and a $500,000 line, so a rental never gets above the cap.
- The FHA cap does not set a home equity line’s limit. It governs FHA-insured cash-out loans only.
- A line is the smallest of three numbers: value times the CLTV ceiling minus existing liens, the program’s dollar cap, and what income and debt-to-income support.
- A rental held in an LLC is not eligible for the line. A rental that needs more than $500,000 usually belongs in a DSCR cash-out refinance.
- Every figure is subject to lender guidelines and full file review. This is not a commitment to lend.
Two Different Rulebooks
The question mixes two products that do not talk to each other. FHA cash-out is a government-insured first mortgage for owner-occupied homes. A bank statement HELOC is a non-QM line of credit, written by a wholesale lender to its own guidelines.
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.
Non-QM simply means a loan that sits outside standard agency rules. A HELOC is a home equity line of credit, a revolving line secured by the property.
So “above the FHA cap” is not a loophole. It is a comparison. The real question is how much leverage a different product allows against the same property.
Lendmire is a mortgage broker. It places these lines through select wholesale partners and is never the lender. The figures below come from those partners’ guidelines.
What the FHA Cash-Out Cap Actually Is
FHA cut the maximum loan-to-value on cash-out refinances from 85% to 80%, according to Orrick. A Consumer Finance Monitor summary adds that the limit applies to the property’s adjusted value. Older articles still print 85%. They are out of date.
The cap counts all liens combined. A second lien cannot push an FHA cash-out past 80%. The rule also applies only to owner-occupied principal residences. A rental cannot use FHA cash-out at all.
FHA cash-out also generally expects about a year of owning and living in the home. A bank statement line follows its own seasoning rules instead.
“Above the cap” can mean three things:
1. Above 80% of value. This is possible only on an owner-occupied line, and only at higher credit tiers.
2. Above the FHA loan limit. That limit is set by county and has nothing to do with a line.
3. Above the line’s own dollar cap. That cap is $500,000 on most lines.
How Much Can You Borrow on a Bank Statement HELOC?
The answer is the smallest of three numbers.
Number one: the CLTV room. Take the property’s value, multiply by the CLTV ceiling, then subtract every lien already on the property. What is left is the most the line can be.
Number two: the dollar cap. Lines run from $25,000 to $750,000, though most top out at $500,000. Anything above $500,000 is primary-residence only. It needs a 700-or-better credit profile (720 on the program with a 5-year interest-only draw and 25-year repayment), caps at 75% CLTV, and requires a full appraisal.
Number three: income and DTI. Debt-to-income (DTI) compares your monthly debts to your monthly income. The maximum is 50%. It drops to 45% for scores from 600 to 679. The lender reviews your file on the interest-only payment at the maximum draw.
Here is how the ceilings stack up by occupancy.
| Occupancy | Ceiling | Credit and line size |
|---|---|---|
| Primary residence | 90% CLTV | 720+, up to $500,000 |
| Primary residence | 75% CLTV | 700+ (720 on the longer-runway program), up to $750,000 |
| Second home | 90% CLTV | 720+, up to $500,000 |
| Investment property | 70% CLTV | 700+, up to $500,000 |
Lower credit tiers step the ceiling down. A primary home at 660 or higher reaches 85% CLTV on a line up to $500,000, one at 640 reaches 80%, and one at 620 reaches 70%. Never read 90% without the 720 attached to it. A few states also apply their own combined-loan caps.
Which Limit Binds First?
Run the numbers in percentages and the pattern shows up fast.
| Scenario | What binds first |
|---|---|
| Primary home, 720+, first mortgage at 55% of value | CLTV room: 35% of value |
| Primary home worth far more than the cap | The $500,000 line cap |
| Rental, 720 score, first mortgage at 50% of value | CLTV room: 20% of value |
| Rental, 680 score | Credit: investment floor is 700 |
Picture an owner with a self-employed income, a primary home, and a low-balance first mortgage. At a 720 profile, the ceiling leaves room equal to 35% of value. On a modest home, that room is the limit. On an expensive home, the $500,000 cap hits before the CLTV math does.
Now picture that same owner holding a rental with a first mortgage at half its value. The 70% ceiling leaves 20% of value. That is a thinner slice, and the cap still sits at $500,000. The line never gets above what the FHA-style 80% would allow.
Market surveys report that lenders typically want about 20% equity left in an investment property, according to NerdWallet. The network’s investment ceiling of 70% CLTV is a little stricter, since it leaves 30% in the property.
Can You Borrow on a Bank Statement HELOC Above the FHA Cash-Out Cap on a Rental?
No. A rental line stops at 70% CLTV and $500,000, and it needs a 700 minimum credit score. A score of 720 or 700 gets the same investment ceiling. There is no higher tier.
Investment-property lines come with a smaller lender pool and stricter requirements than a primary-home line. Multiple appraisals may also be required. That matches what a broker sees across wholesale guidelines.
Two structural limits catch rental owners:
- Title. The line requires fee simple or leasehold title held by you personally or by a revocable living trust. LLCs, corporations, partnerships, and irrevocable or land trusts cannot hold title. A property already deeded to an LLC needs a vesting change, or a different product.
- Property type. Single-family, 2-4 units, PUDs, townhomes, and condos (including non-warrantable) are eligible. Manufactured homes, co-ops, condotels, log homes, and commercial or mixed-use properties are not.
A borrower is also limited to three lines. And a borrower with more than 15 financed properties is not eligible.
How Bank Statements Change the Math (and What They Don’t)
Bank statements change how your income is documented. They do not change how much equity the property has.
A bank statement program lets self-employed borrowers qualify on 12 to 24 months of deposits instead of tax returns, as Scotsman Guide describes. The borrower is reviewed on documented income under the applicable program, subject to lender guidelines. For business statements, a lender applies an expense factor to the deposits. A profit-and-loss statement or CPA letter can sometimes stand in.
Everything else still gets reviewed:
- Credit: a 600 program floor, with a single-bureau score keyed to the primary wage earner.
- Housing history and tradelines, which vary by program.
- Bankruptcy needs 4 years of seasoning from discharge or dismissal.
- Valuation: lines at or below $500,000 usually run an automated valuation. A higher CLTV may trigger a second valuation, and you can always request a full appraisal. Above $500,000 a full appraisal is required.
One thing surprises people. A line is reviewed on your personal income and DTI. The rent on the property does not count toward the line the way it does in a DSCR loan.
Keeping Your First Mortgage
This is the genuine strength of the product. A line can sit as a standalone second lien behind your existing first mortgage. Your first loan stays untouched. If you hold a low-cost first mortgage, you avoid resetting the whole balance just to pull cash.
A line can also sit in first-lien position on a property with no mortgage. Whether a specific first mortgage allows a junior lien depends on that loan’s terms and the lender’s guidelines.
Know the draw mechanics before you commit. At least 75% of the line is drawn at closing. The line is variable and never converts to fixed. Primary and second-home lines offer two structures: a 3-year interest-only draw with a 17-year repayment, or a 5-year draw with a 25-year repayment. Investment lines use the 5-year and 25-year structure only. After closing, the minimum subsequent draw is generally $1,000.
The CFPB notes that a lender may restrict further draws if the home’s value falls significantly. Plan on the line you draw at closing being the line you can count on.
Key Terms Defined
CLTV (combined loan-to-value): Every loan secured by the property, added together, divided by the property’s value.
Adjusted value: The value figure FHA uses for its cap, which can differ from a raw purchase price or estimate.
Subordinate lien: A loan that sits behind the first mortgage in repayment priority.
Line cap: The program’s maximum dollar line, regardless of how much equity you have.
Bank statement program: A program where deposits in your bank accounts, not tax returns, document your income.
DSCR (debt service coverage ratio): Monthly rent divided by the monthly payment on the property, including principal, interest, taxes, insurance, and any HOA dues.
When a DSCR Cash-Out Makes More Sense
A rental owner who hits the investment ceiling has a clean alternative. A DSCR cash-out refinance reads the property instead of your personal income. It qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
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.
Here is how the three paths compare.
| Factor | FHA cash-out | Bank statement HELOC | DSCR cash-out |
|---|---|---|---|
| Property | Owner-occupied only | Primary, second home, rental | Non-owner-occupied rental |
| Leverage | 80% of value, all liens | Up to 90% CLTV at 720+ (primary); 70% (rental) | About 75% LTV standard rental; 70% STR |
| Income read | Borrower income | Bank statement deposits | Property rent vs. payment |
| Title | Individual | Individual or revocable trust | LLC allowed, subject to lender program eligibility |
| Lien position | Replaces first mortgage | Can sit behind first | Replaces first mortgage |
Most DSCR cash-out programs we place files with top out around 75% LTV on standard rentals. Short-term rentals run lower, at 70% on a cash-out. Expect about 6 months of seasoning, a credit score of around 660 on most programs (a 620 floor exists in parts of the network), and a 700-plus score for the strongest leverage. Loan sizes run up to $3,000,000 on standard programs (smaller balances available through select lenders). Reserves vary by lender, leverage, loan size, and transaction type, and are commonly around 6 months of PITIA, which is principal, interest, taxes, insurance, and association dues.
A coverage of 1.00 is where many select programs start. A separate select-lender path takes coverage below 1.00, with leverage and terms adjusted. Stronger coverage opens better pricing and leverage.
Clearing 1.00 is not the same as positive cash flow. DSCR compares rent to PITIA only. Repairs, vacancy, management, utilities, and capital expenses sit outside the calculation.
The trade is simple. You give up the first mortgage you may like. You gain a larger ceiling, an LLC option, and a loan sized to the property. Lendmire’s complete DSCR loans guide walks through the full program picture.
Common Misreads
The FHA cap sets what a HELOC can borrow. It does not. It binds FHA-insured loans only. A line’s limit is its own ceiling.
A rental can borrow above the cap. On this network, it cannot. Rentals stop at 70% CLTV.
80% means 80% of your equity. It means 80% of the property’s value, with every lien counted inside it.
Bank statements mean light underwriting. Credit, DTI, title, equity, and the property all get reviewed.
Rental income offsets the line payment. Not on a line. It reads your income and DTI, not the rent.
Frequently Asked Questions
Can a bank statement HELOC ever exceed 80% CLTV?
Yes, but only on an owner-occupied property. A primary residence or second home can reach 90% CLTV at a 720-or-better credit profile, up to $500,000. On a primary residence, credit profiles of 660 and above can reach 85% CLTV on a line up to $500,000, while 640 reaches 80%. Investment properties are capped at 70% CLTV.
Does a line count toward the FHA cap?
Only if it sits behind an FHA cash-out loan, in which case the combined liens must stay at or under 80% of adjusted value. A line from a wholesale lender follows its own ceiling. The two rulebooks do not merge.
Can my LLC-owned rental get a bank statement HELOC?
No. Title must be held by an individual or a revocable living trust. You can deed the property out of the LLC, or use a DSCR cash-out refinance, which can be written to an LLC subject to lender program eligibility.
What if I need more than $500,000 from a rental?
A rental line cannot go that high. The maximum is $500,000 at 70% CLTV, and a score of 700 is the minimum. A DSCR cash-out, which runs up to about 75% LTV on standard rentals, is usually the next route.
Why do older pages say FHA cash-out goes to 85%?
They predate the cut. Two law-firm summaries confirm FHA lowered the limit to 80%.
Next Step
If you are weighing a home equity line against a cash-out refinance and want to see how the numbers work, Lendmire can help you compare options based on the property, the equity available, credit profile, combined leverage, and your goals. Reach the team at 828-256-2183, or request a quote.
A deeper walk-through of investment-property equity extraction lives in Lendmire’s guide to cash-out refinance on an investment property.
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.
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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. Orrick
3. NerdWallet
4. Scotsman Guide: One Out of 20 Mortgages Are Non-QM
5. CFPB
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: What Is a Bank Statement HELOC With a Draw Period and a Repayment Period? · How Much Can You Borrow With a Bank Statement HELOC for Borrowers Paid on a 1099? · Best Bank Statement HELOC Program When You Want to Borrow All of Your Equity
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.