How Much Can You Borrow on a Bank Statement HELOC on 1099 Commissions?

The Quick Read: It depends on three limits, and the smallest one wins: the equity left after your existing liens at the program’s combined loan-to-value ceiling, the program’s maximum line size, and the line your commission income can carry on a debt-to-income test, which is run on the payment for the full line, not the amount you draw. On an investment property, the ceiling across Lendmire’s wholesale network is 70% combined loan-to-value, with a $500,000 maximum line. Commissions decide whether you qualify. Equity usually decides how much.

• Primary-residence and second-home lines can reach higher, with tiers tied to credit.
• Debt-to-income is tested on the interest-only payment at the maximum draw.
• An LLC cannot hold title on these lines, which rules out many rentals.

The Three Limits, Side by Side

The line you get is the lowest of three numbers. Each one answers a different question. A bigger commission year helps with only one of them.

Say a rental carries modest debt relative to its value. The equity math gives you a figure well under the cap, so equity sets the limit. Now say a high-value home has a lot of equity. The cap wins, no matter how much you earned.

Your qualifying income acts as a gate. If it can’t carry the payment, the line shrinks or the file stops.

Which Ceilings Apply to Your Property?

Ceilings depend on occupancy, so one number can’t describe every file. These are typical ranges across the select wholesale lenders Lendmire works with, subject to lender guidelines and full file review.

Investment property is the row most 1099 investors care about. It has no higher tier. A 720 score and a 700 score both land at 70% CLTV there.

Primary residences and second homes scale by credit. On a primary residence, a 720+ score reaches 90% CLTV on lines up to $500,000. A 700+ score reaches 85% CLTV up to $500,000, and a 640+ score reaches 80%. A line above $500,000 is primary-residence only. It needs a 700 score (720 on the longer-runway program, covered below), caps at 75% CLTV, and requires a full appraisal.

Use the table for planning.

Turning 1099 Commissions Into Qualifying Income

Lenders don’t take your gross 1099 total at face value. They convert your income into a monthly qualifying figure. That figure is what the DTI test uses.

Across the wholesale network, the documentation path varies by lender. Commission earners usually see one of two routes:

• Bank statements. The lender averages qualified deposits over a set run of months, then applies an expense factor.
• 1099 forms. The lender takes one or two years of 1099s and applies an expense adjustment to the gross.

Many commission earners have both on hand. Which route produces more income depends on the expense factor each program applies. A program with a heavy factor on deposits can favor the 1099 route, and the reverse also happens. A broker who sees several lenders’ guidelines can compare them for your file. Income is reviewed on documented income under the applicable program, subject to lender guidelines.

Deposit cleanup matters too. Transfers between your own accounts, loan proceeds and one-off credits are generally stripped out. Recurring commission payments from brokerages, carriers or clients generally count.

Lumpy income hurts the average. A year with two huge closings and a long dry spell averages lower than steady deposits with the same total, and a recent decline in deposits can cut the figure further. Programs also tend to want a stable work history in the same line of work.

How the Payment Is Tested

Here is the part that surprises people. The lender doesn’t test the payment on what you plan to borrow. It tests the interest-only payment on the maximum draw.

That follows how these lines work. The CFPB’s HELOC explainer describes a revolving line you can draw on repeatedly, followed by a repayment period when you can no longer borrow. The agency’s HELOC booklet adds that interest-only plans require nothing toward principal during the draw period, and that payments can change even if you don’t draw more. Underwriters size for that exposure.

On this network, a few structural facts shape your math:

• DTI tops out at 50%. It tops out at 45% for credit profiles from 600 to 679. A ratio above 45% requires a 680 minimum.
• At least 75% of the line is drawn at closing. Plan around a mostly used line, not an open reserve.
• Pricing floats through the draw and repayment periods and never converts to fixed.
• Investment lines run a 5-year interest-only draw followed by a 25-year repayment period. Primary residences and second homes can also take a 3-year draw followed by 17 years of repayment. Tennessee shortens both structures.

Two wholesale programs sit behind these figures. One uses the 3-year draw, and the longer-runway program uses the 5-year draw. Any figure applies only within its own program’s terms.

A Worked Example in Percentages

Run the numbers on a commission earner buying a rental with this line. Everything below is a modeled assumption, shown in percentages, not a quote.

Step one, income. Start with twelve months of deposits. Remove transfers and one-off credits. Apply the program’s expense factor. What’s left, divided by the months in the period, is monthly qualifying income.

Step two, DTI room. The ceiling is 50% of that income. Suppose existing debts, including your first mortgage payment, already use 30% of it. That leaves 20% of qualifying income for the new line’s payment, calculated at the full draw.

Step three, equity. On an investment property, the ceiling is 70% CLTV. If your first lien sits at 40% of value, the equity limit is the 30% of value left under the ceiling.

Step four, compare. Take the lowest of three results: 30% of value, the $500,000 cap, and the line your 20% DTI room can support. On a modest-value home, the equity figure is smaller than the cap, so equity binds. On a high-value home, the cap binds. When commissions are thin or the first lien is heavy, DTI binds.

That is why a bigger year of commissions doesn’t always grow the line. Raising income only moves the answer when DTI was the tightest limit.

For a pre-check, work through those four steps before you apply. Lendmire’s illustrative calculator can model the leverage side, though it gives estimates, not a quote.

When 1099 Totals and Deposits Don’t Match

Commission income rarely matches cleanly. Splits, referral fees, clawbacks and chargebacks can put your 1099 total and your deposits at different numbers.

Say a brokerage reports gross commissions on your 1099, but your split means only part of that reached your account. Or a closing gets reversed and you return a payout later. Deposits then run lower than the 1099, or a refund shows up as a withdrawal.

Which figure counts depends on the program and the route you choose. Programs that read deposits tend to care about what landed. Programs that read 1099s start from what the payer reported. Neither is automatically better.

A mixed income file (W-2 plus commissions) adds another variable. Programs differ on whether they accept 1099 only, deposits only, or a blend. A recent switch from W-2 to 1099 work, or a short history, can limit which programs fit.

What Shrinks Your Line

Several things cut a line below the headline ceiling:

• A heavy first lien. Existing liens count in the CLTV, so a large balance leaves less room.
• A lower credit tier. On primary residences and second homes, ceilings step down with the score. A 700 minimum applies to investment lines.
• A big expense factor. It reduces the income the DTI test sees.
• Existing debts. Every monthly obligation uses part of the 50% DTI limit.
• Falling home value. The CFPB notes that a lender may freeze or reduce a line if value drops significantly.
• Derogatory history. A bankruptcy needs four years of seasoning from discharge or dismissal. Foreclosure history on an investment file follows a seven-year path, or four years for a deed-in-lieu, pre-foreclosure or short sale.
• Exposure limits. A borrower is limited to three lines, and borrowers with more than 15 financed properties are not eligible.

Valuation usually isn’t a hurdle. Lines at or below $500,000 ordinarily use an automated valuation, though a higher CLTV may require a secondary valuation. You can request a full appraisal in any case. Above $500,000, a full appraisal is required.

Where LLC-Held Rentals Fall Out

This is the sharpest structural limit for investors. Title must be held by you personally or by a revocable living trust. LLCs, corporations, partnerships and irrevocable, blind or land trusts can’t hold title.

If your rental sits in an LLC, a bank statement HELOC isn’t an option unless you change vesting first. A DSCR cash-out refinance is the usual alternative, subject to lender program eligibility. It sizes on the property’s rent against its payment rather than your commissions. Lendmire’s complete DSCR loans guide covers how those files work.

A DSCR file looks at rent against payment. Clearing a 1.00 coverage ratio, where select programs start, is not the same as positive cash flow. Repairs, vacancy and management sit outside the math.

Eligible property types for the line include single-family, 2-4 units, PUDs, townhomes and condominiums, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use and agricultural-zoned properties are not offered. The 2-4 unit tier carries a 640 minimum on the longer-runway program.

Documents Commission Earners Should Gather

Pulling these together before you talk to a broker makes the income comparison easier:

• Twelve months of statements from the account where commissions land, and the 1099s for the periods you may use.
• Payer or brokerage disbursement reports that reconcile your 1099 to your deposits.
• A short note explaining any large deposit, transfer or reversal.
• A current mortgage statement for every lien on the property.
• Proof of your work history in the same line of work.

Credit uses a single-bureau score keyed to the primary wage earner. Programs also look at tradelines and housing history across all financed properties.

Key Terms Defined

Bank statement HELOC: a home equity line that is reviewed around documented deposits rather than tax-return income, subject to lender guidelines.

1099-NEC: the tax form a payer sends to report nonemployee compensation such as commissions.

CLTV (combined loan-to-value): all liens on the property, including the new line at its full limit, divided by the property’s value.

DTI (debt-to-income): your monthly debt payments divided by your qualifying monthly income.

Draw period: the stretch when you can borrow and typically pay interest only; it is followed by repayment, when you can’t borrow.

Expense factor: the percentage the lender subtracts from gross deposits or 1099 totals to estimate business expenses.

This article is general information, not legal or tax advice. Consult a qualified professional, such as an attorney or CPA, about your own situation.

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 that shops select wholesale lenders; it is not the lender, and every figure here is subject to lender guidelines and full file review.

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. CFPB’s HELOC explainer

2. CFPB – What You Should Know About Home Equity Lines of Credit (HELOC booklet)