The Quick Read: It depends on your property’s value, your first mortgage balance and your credit score: through select programs, a second-lien line reaches 70% combined loan-to-value at 720 or better, up to $500,000, minus what you owe on the first mortgage, subject to underwriting. Taking the home off the market does not raise that ceiling. It only decides whether the property is eligible.
- A property listed for sale in the prior 2 months is not eligible for this line.
- A lease must be in place, because the rent qualifies the line, not your personal income.
- A first-lien line above $500,000, up to $1,000,000, carries a lower ceiling of 65% loan-to-value at 720 or better.
- A rental with no mortgage can take a first-lien line instead, up to 75% loan-to-value at the top credit tier.
- Lines start at $50,000, with most of the line funded at closing.
How Is the Maximum Line Calculated?
The maximum line is the property’s value times the leverage cap, minus every lien already on it, limited by the program’s dollar ceiling. Delisting changes none of its inputs.
Here is the formula on a second lien, the version most owners need. Combined loan-to-value (CLTV) adds your first mortgage balance and the new line, then divides by value. The cap is 70% CLTV at a 720 score or better. Below 720 there is no second-lien option on this program.
Three examples show how the first mortgage balance drives the result. All use percentages of value, because your own appraisal sets the real number.
- First mortgage at 40% of value. The line can reach up to 30% of value (70% minus 40%), subject to the $500,000 ceiling.
- First mortgage at 55% of value. The line shrinks to about 15% of value. On a modest property that may land near the $50,000 minimum, so check the size before you apply.
- First mortgage at 70% of value. Nothing is left. There is no second-lien room.
On a high-value rental, the $500,000 second-lien ceiling may bind before the percentage does. On a modest one, the $50,000 floor may be the problem.
The program also has a declining-market flag. If the property’s market carries it, the leverage ceiling drops 5 points. The valuation reveals that, not the borrower.
What Does Taking the Home Off the Market Actually Change?
Taking the home off the market changes eligibility, not leverage. Lenders treat a for-sale listing as a sign you may not intend to hold the property. This program turns that into a plain rule: a property listed for sale in the prior 2 months is ineligible.
Lenders set their own look-back windows, and the wording varies. Some count from the listing date, others from the withdrawal date. Confirm on your file how the clock is measured before you count days.
The conversion matters just as much. This line is a loan on a rental, so it is never written on a home you live in. If you pulled the listing and now rent the house out, the line looks at the rental’s income, not yours. A signed lease must be in place. A two-to-four-unit property may have at most 1 vacant unit.
Here is how the stages play out.
| Stage | Status | Best move |
|---|---|---|
| Not listed, leased, seasoned | Reviewable | Apply before any listing |
| Currently listed | Ineligible | Hold the application |
| Just withdrawn | Inside the 2-month screen | Wait, confirm how the clock runs |
| Withdrawn 2+ months, leased | Reviewable | Apply with lease and valuation |
“Reviewable” means a lender may look at the file. It is not an approval, and every file is underwritten individually.
How Does the Rent Qualify the Line?
The rent qualifies the line. There is no traditional personal-income documentation: no W-2s, pay stubs or personal debt-to-income calculation. The line qualifies primarily on property-level rental income covering the payment, subject to lender guidelines.
The test is a debt service coverage ratio (DSCR) of at least 1.10x. That means gross monthly rent divided by a qualifying payment. The qualifying payment is a fully amortizing payment on the entire credit limit, run at a stressed rate set 2 percentage points above the starting terms. Taxes and insurance are not part of it.
Two details trip up new borrowers.
First, the stress payment covers the whole limit, not just the amount you draw. A bigger line means a bigger test payment, so a smaller request can clear when a larger one will not.
Second, the lender decides which rent counts. Rent is the lesser of the appraisal’s market rent (Form 1007) and the lease, unless three months of receipts support a lease above market. A freshly converted home has no rent history, so an above-market lease alone will not carry the file.
How the first-mortgage payment enters the coverage math on a second lien is not something to assume. Confirm on the file how the lender treats it, because the lender’s own calculation governs.
What Credit and Property Rules Apply?
A second lien needs a 720 score. A first lien needs 700. The lender’s own credit report sets the tier.
Mortgage history matters too. The program wants no 30-day late payment in the last 12 months. It also wants 48 months since a bankruptcy, foreclosure, short sale or deed-in-lieu. No reserves and no cash to close are required, subject to underwriting. Exposure per borrower tops out at 5 loans or $2,500,000 with the program.
Eligible properties include single-family homes, PUDs, townhomes, two-to-four units, and warrantable and non-warrantable condominiums. Lots up to 10 acres also qualify. The leverage tiers apply to every property type.
Several property types fall outside this lane:
- rural-designated property
- row homes
- condotels
- commercial or agricultural property
- leaseholds
- land trusts
- age-restricted communities
- hobby farms
- modular and log homes
- land contracts
- mixed-use property
- properties with a solar lien
Vesting in your LLC is allowed on this investment-property line, subject to program terms. The members sign as guarantors. A title holder who is not a borrower signs a non-borrowing owner acknowledgment and the security instrument.
How Does the Valuation Work?
Lines up to $400,000 use an automated valuation with a confidence score of 85 or better, paired with a property inspection report. A full interior appraisal is the other route. Lines above $400,000 need a full interior appraisal (Form 1004, 1073 or 1025). Appraisal waivers are not accepted.
Title work also scales with size. A first lien and any second lien above $400,000 get a full title policy. Smaller second liens use an owner-and-encumbrance report.
Hazard insurance must cover both liens. Flood coverage is added where it is required.
What Seasoning Rules Apply?
A rental bought or refinanced inside the last 6 months is not eligible (that clock runs from the last note date to the new note date), and the owner must have held title for 6 months (settlement date to note date).
Keep the listing screen and the seasoning clocks separate. They measure different things. A property can clear one and still fail the other.
What About a Rental With No Mortgage?
A rental with no mortgage can take the line in first position. The leverage tiers differ from a second lien, and they are written as loan-to-value (LTV), not combined:
- 740 or better: up to 75% LTV on lines up to $500,000.
- 700 to 739: up to 70% LTV on lines up to $500,000.
- Lines above $500,000, up to $1,000,000: 65% LTV at 720 or better. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
The 65% ceiling on first-lien lines above $500,000 is the number that surprises owners who assumed the higher tier carries over.
A first lien exists only on a rental with no mortgage. If you keep a first mortgage, you are looking at a second lien, with its 720 floor.
How Do the Draw and Repayment Periods Work?
The line is a revolving, open-end credit line. You draw for 5 years with interest-only payments on the drawn balance. Then a 25-year fully amortizing repayment period follows, for a 30-year maturity. The rate is variable.
At least 80% of the line is drawn at closing, and the closing draw is never less than $50,000. On the smallest lines, that means the whole line is drawn at closing. Later draws are at least $5,000 each.
The structure has a cash-flow consequence. The CFPB’s HELOC explainer notes that payments on a HELOC can jump when the draw period ends and repayment begins. On a rental, plan for that step-up now, because it falls on the property’s cash flow. The rate and the pricing terms come with the lender’s disclosures.
How Does It Compare With a Cash-Out Refinance?
A DSCR HELOC leaves your first mortgage alone and adds a second lien. A cash-out refinance replaces the first mortgage and can reach larger amounts. It also sets its own delisting rules.
| Factor | DSCR HELOC | Cash-out refinance | Closed-end second |
|---|---|---|---|
| First mortgage | Stays in place | Replaced | Stays in place |
| Structure | Revolving line | One new loan | Lump sum |
| Delisting screen | 2-month look-back | Program-specific | Program-specific |
If your existing first mortgage has terms you want to keep, the line preserves them. If you need more leverage than the line allows, a cash-out refinance may fit better.
When Does This Not Work?
Several situations stop the line, and each has a practical alternative.
- Still listed or just withdrawn. The property is outside the program for now. Wait out the screen.
- Bought or refinanced recently. The seasoning clocks have not run. A cash-out path may have different rules.
- Under contract. A line is not the right tool.
- Rural, condotel or row home. The property type is outside this lane.
- Thin equity. If the math lands below $50,000, the program has no cell for it.
- Another property with equity. An unlisted rental may carry the line instead.
- Tennessee. The program is offered in 15 of Lendmire’s 16 licensed states, every licensed state except Tennessee.
NerdWallet notes that investment-property HELOCs come from a smaller pool of lenders than home-you-live-in lines, with stricter requirements. A broker with a wholesale network can narrow that search. Lendmire’s complete DSCR loans guide explains how property-rent-based lender review works across products.
What Should You Do First?
Sequence is the biggest practical lever. Apply before you list, or plan around the 2-month screen. Pulling a listing and applying the next week runs into it.
Then gather the file:
- the signed lease
- the first-mortgage statement
- the hazard insurance declaration covering both liens
- the vesting deed, or LLC documents if the property sits in an entity
- a valuation path decided by the line size
Keep the request modest. A smaller line eases the stress test. And remember that every figure here is a ceiling or floor, never an offer.
Key Terms Defined
DSCR (debt service coverage ratio): Gross monthly rent divided by the qualifying payment. This program wants at least 1.10x.
CLTV (combined loan-to-value): The first mortgage balance plus the new line, divided by the property’s value.
LTV (loan-to-value): The single loan balance divided by value. It applies to a first-lien line on a rental with no mortgage.
Second lien: A loan that sits behind the first mortgage you keep.
Draw period: The first 5 years on this program, when you can borrow and pay interest only on what you drew.
Repayment period: The 25 years after the draw period, with fully amortizing payments.
Look-back: The window a lender checks for a recent for-sale listing. On this program, it is 2 months.
Seasoning: The waiting period tied to when you bought, refinanced or took title.
Next Step
If you are considering a home equity line on a rental property and want to see how the numbers work, Lendmire can help you compare DSCR HELOC options based on the property, the rent, the equity available, credit profile, combined leverage, and your goals. Lendmire is a broker, so it arranges the file through a wholesale lender in its network, and the lender approves it.
Frequently Asked Questions
Does taking my home off the market raise or lower how much I can borrow?
Neither. The size comes from value, the leverage cap, your credit tier and the liens on the property. Delisting only decides whether the property is eligible yet, so the 2-month screen is the thing to watch.
How long after delisting can I apply?
The program screens out any property listed for sale in the prior 2 months. Confirm on the file whether that window runs from the listing date or the withdrawal date. You also need a lease in place by then.
Can my LLC own the rental?
Yes, subject to program terms. Vesting in your LLC is allowed on this investment-property line. The members sign as guarantors, and a title holder who is not a borrower signs a non-borrowing owner acknowledgment and the security instrument.
How much of the line do I have to draw at closing?
At least 80% of the line, and never less than $50,000. On the smallest lines, that means the whole line. Later draws are at least $5,000 each.
How long must I own the property first?
Two six-month clocks apply: the line is not available on a rental bought or refinanced in the last 6 months (last note date to new note date), and title must have been held for 6 months (settlement date to note date). A property can clear one clock and still fail the other. Both must run before the file is reviewable.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage brokerage serving landlords and real estate investors in 16 licensed states. DSCR home equity lines of credit on non-owner-occupied one-to-four-unit rentals are arranged through wholesale lending channels in 15 of those states (every licensed state except Tennessee); Lendmire brokers the line and the lender underwrites each application on the property’s rent, credit and leverage. 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
2. NerdWallet – HELOC on an investment property
This article is part of Lendmire’s DSCR HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR HELOC Requirements in a Declining Market · How to Qualify for a DSCR HELOC When the Home Has a PACE Assessment · DSCR HELOC Requirements for a Former Home You Now Rent Out
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.