The Quick Read: You can borrow up to 70% combined loan-to-value on a second lien, or up to 75% loan-to-value on a paid-off rental at the top credit tier, minus any mortgage already recorded, through select programs and subject to underwriting.
- The formula: property value × the leverage ceiling, minus every lien already on the home.
- Second lien: up to 70% CLTV at a 720 credit score or better, on lines from $50,000 to $500,000.
- First lien (no mortgage): up to 75% LTV at 740 or better, 70% from 700 to 739, and 65% on lines above $500,000, up to $1,000,000.
- Rent test: at least 1.10x coverage, measured against a payment on the entire credit limit, not just the drawn amount.
- Availability: 15 of Lendmire’s 16 licensed states, every licensed state except Tennessee. The exact numbers vary by lender and program and follow a full review of property, leverage, and credit.
What Is a DSCR HELOC on a Single-Family Rental?
A DSCR HELOC is a revolving line of credit secured by a rental you keep. It is written as a standalone second lien behind your existing first mortgage, or as a standalone first lien on a rental with no mortgage. It qualifies primarily on the property’s rental income covering the payment, subject to lender guidelines. That means no traditional personal-income documentation, W-2s, pay stubs, or personal income calculation.
The structure matters for sizing. A second lien leaves your current first mortgage exactly as it is, so you keep whatever terms you already hold.
Lendmire is a broker, so it arranges these lines through a wholesale lender in its network rather than lending directly. NerdWallet reports that rental HELOCs generally mean fewer lenders to choose from and less borrowing room than a line on your primary home.
How Is the Maximum Line Calculated?
The line equals the leverage ceiling times the property’s value, minus every lien already recorded. Then the program’s dollar cap trims the result if it is lower. Rent, credit tier, and valuation method all sit around that math, but the math itself is just equity.
The CFPB’s HELOC explainer describes equity as the home’s value minus what you owe. Its HELOC booklet shows lenders setting the limit as a percentage of value, less the balance you owe. A rental line follows the same logic with a lower percentage.
Here is how that plays out across the network’s tiers, all subject to underwriting:
| Position | Credit score | Leverage ceiling | Line size |
|---|---|---|---|
| Second lien | 720 or better | 70% CLTV | $50,000 to $500,000 |
| First lien | 740 or better | 75% LTV | Up to $500,000 |
| First lien | 700 to 739 | 70% LTV | Up to $500,000 |
| First lien | 720 or better | 65% LTV | Above $500,000, to $1,000,000 |
Second-lien figures are combined loan-to-value, or CLTV: the first mortgage balance plus the new line, divided by value. First-lien figures are plain loan-to-value, or LTV. Below 720 there is no second-lien option. A borrower who keeps a first mortgage can only take a second lien, so a 700 to 719 score with a mortgage in place is the gap that stops the file.
Worked Equity Examples
Consider a single-family rental with a first mortgage at 50% of its value. At a 720 score, the 70% CLTV ceiling leaves room for a line worth about 20% of value. If that 20% lands below $50,000, the property does not fit the program, because lines start at $50,000.
Now take a rental with a first mortgage at 40% of value. The same ceiling leaves about 30% of value as room. On a higher-value home, the $500,000 cap can bind before the percentage does.
Compare a recent purchase financed at a high loan-to-value, say 75% or 80%. Those numbers sit above the 70% second-lien ceiling, so there is no room. A first mortgage at 70% or more leaves nothing either. Long-held rentals and free-and-clear rentals carry the most capacity.
A paid-off rental changes the picture. At a 740 score, a first-lien line can reach 75% of value, up to $500,000. For a line above $500,000, the ceiling drops to 65% LTV at a 720 score or better. So a bigger line can come with a lower percentage, and it only helps on higher-value homes. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
Two adjustments can shave the result. A declining-market flag lowers the ceiling by 5 points. Philadelphia lines carry a ceiling 10 points lower.
Does Rent Change the Size of the Line?
Rent does not raise your ceiling, but it can shrink your line. The program requires 1.10x coverage: gross monthly rent divided by a qualifying payment. That payment is a fully amortizing principal-and-interest payment on the entire credit limit at the start rate plus 2 percentage points. Taxes and insurance are not part of it.
That stress payment is the key detail. The lender tests the whole limit, not what you plan to draw. A line that clears the equity math can still fail the rent test, because a larger limit means a larger stress payment. When that happens, a smaller limit may pass where the larger one does not.
Picture two lines against the same single-family rental. The larger line produces coverage just under 1.10x. The smaller line, with the same rent and a smaller stress payment, clears 1.10x. The equity allowed either one, but rent set the practical ceiling.
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 lease in place is required. Higher short-term-rental income does not raise the limit either, since equity sets the size and rent only has to clear the test. Short-term rental rules can vary by city, county, HOA, and property type, so investors should confirm local rules before relying on projected rental income.
On a second lien, confirm on the file how the lender treats the first-mortgage payment in its coverage calculation. The lender’s calculation governs, and any example here is illustrative.
Which Ceiling Binds First?
Run the checks in this order and the lowest one is your real limit.
| Check | What it controls | Typical result |
|---|---|---|
| Equity ceiling | Value × CLTV or LTV, minus liens | Sets the maximum on most files |
| Dollar cap | $500,000 (or $1,000,000 at 65% LTV) | Binds on higher-value homes |
| Rent test | 1.10x on the full limit | Can reduce the limit |
| Credit tier | 720 second lien, 700 or higher first lien | Decides the product and tier |
| Line minimum | $50,000 | Rules out thin-equity rentals |
Credit works as a gate and a tier. A 720 score on a second lien gets 70% CLTV. Mortgage history matters too: no 30-day late in the last 12 months, and 48 months since a bankruptcy, foreclosure, short sale, or deed-in-lieu. No reserves and no cash to close are required, subject to lender guidelines.
The Draw Rules That Limit Flexibility
A HELOC suggests a big unused cushion, but this program works differently. 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 must be at least $5,000 each.
The draw period is five years, interest-only on the drawn balance. A 25-year fully amortizing repayment period follows, for a 30-year maturity. The rate is variable, and the rate and pricing terms come with the lender’s disclosures. Because the payment moves with the balance and the rate, the stress test is conservative by design, and your actual payment can still change.
For sizing, this means you should pick a limit you will actually use, not the biggest number you can qualify for. Borrowed money starts costing interest on day one of the draw, and the repayment period brings principal into the payment.
Valuation, Seasoning, and Title
Lines up to $400,000 use an automated valuation with a confidence score of 85 or better plus a property inspection report, or a full interior appraisal. Lines above $400,000 need a full interior appraisal (Form 1004, 1073, or 1025). Appraisal waivers are not accepted. An automated valuation will not capture a recent rehab, so a property with fresh improvements may want the full appraisal.
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).
Title can sit in your name or in your LLC, subject to program terms. The members sign as guarantors, and a title holder who is not a borrower signs a non-borrowing owner acknowledgment. A line on this program is personal credit exposure either way, so the LLC is not a shield from the debt. Foreign nationals and ITIN borrowers are not eligible, and borrowers need a Social Security number.
Multiple Rentals and Exposure
Each line is secured by one property, so equity is measured property by property. Equity in one rental does not add to the room on another. The program allows at most 5 loans or $2,500,000 per borrower, so a growing portfolio can hit the exposure cap before it runs out of equity.
DSCR HELOC or Cash-Out Refinance?
A cash-out refinance replaces your first mortgage with a larger one and pays you the difference. A DSCR HELOC leaves the first mortgage alone and adds a line behind it. If your existing first mortgage has terms you want to keep, the second lien does that. If you would rather have one loan and a lump sum, a cash-out may fit better.
The complete DSCR loans guide explains how property-rent-based lender review works across the other programs in the network.
From Maximum to Prudent
The maximum is a ceiling, not a target. A sensible size comes from three checks: the equity left after the line, the coverage after the stress test, and what you will do with the money. Leave breathing room if the rental depends on a single tenant, because one vacancy at a time can flip the coverage. Keep in mind that falling behind on a home-secured line can put the property at risk.
Key Terms Defined
- DSCR (debt service coverage ratio): gross monthly rent divided by the qualifying payment.
- LTV (loan-to-value): the loan amount divided by the property’s value.
- CLTV (combined loan-to-value): the first mortgage plus the new line, divided by value.
- Second lien: a loan that sits behind your first mortgage in repayment priority.
- Draw period: the stretch when you can borrow from the line and pay interest only on what you drew; on this program it lasts 5 years.
- Stress payment: the payment the lender uses to test coverage, calculated on the full limit at a higher start rate.
Frequently Asked Questions
What is the most I can borrow on a single-family rental?
The cap is $500,000 on most tiers, and a first-lien line can run to $1,000,000 at 65% LTV with a 720 score or better. Whether you reach the cap depends on value, existing liens, and the 1.10x rent test. Everything is subject to underwriting.
Can I get a DSCR HELOC if I still have a mortgage?
Yes, as a second lien, if your credit score is 720 or better and your combined balance stays within 70% of value. The line must start at $50,000.
How long do I have to own the rental 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).
Does my personal income matter?
The line qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. You do not provide tax returns, W-2s, or a debt-to-income ratio. The lender still reviews your credit report, the lease, and the valuation.
Can I leave most of the line undrawn?
No. Later draws must be at least $5,000, so the flexibility comes after the first draw.
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.
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
1. NerdWallet
3. CFPB – What You Should Know About HELOCs booklet
This article is part of Lendmire’s DSCR HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How Much Can You Borrow on a DSCR HELOC as a Co-Owner Who Is on the Deed? · How Much Can You Borrow on a DSCR HELOC for Refinancing a Balance Into a New HELOC? · How Much Can You Borrow on a DSCR HELOC on That Property?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Legal disclosures. Lendmire (NMLS# 2371349) is a state-licensed mortgage brokerage that arranges financing through wholesale lender relationships. Lendmire is not a direct lender, depository institution, or registered financial advisor. The discussion above is general informational content about real estate financing — it is not financial, legal, or tax advice, and readers should consult licensed professionals for guidance on their individual circumstances. Loan inquiries are subject to lender underwriting; this article does not represent a commitment to lend. Loan terms, rates, and qualification standards vary by borrower, property, and state, and are subject to change at any time. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.