The Quick Read: Yes, but the product is narrow. You need to hold title personally or in a revocable trust, keep combined borrowing at or under 70% of an investment property’s value, and show a credit profile of 700 or better, with income proven from bank deposits instead of tax returns, subject to lender guidelines.
- The line tests you, the borrower: deposits, credit, debt load, and equity. It does not test the rent.
- On an investment property, the network ceiling is 70% combined loan-to-value, with lines from $25,000 up to $500,000.
- An LLC cannot hold title. A rental already deeded to an LLC needs a title change or a different loan.
- Texas homestead limits apply to your own Dallas home, not to the rental.
- Rent-driven cash-out is a separate product, a DSCR cash-out refinance, and the two often work side by side.
Lendmire is a mortgage broker. It places these lines with select wholesale lenders and is never the lender itself. Everything below describes typical program ranges, not promises.
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.
What Is a Bank Statement HELOC, in Plain Terms?
A bank statement HELOC is a revolving line of credit secured by your property. The lender proves your income from deposits in your bank accounts instead of from tax returns. It suits self-employed owners whose write-offs shrink their taxable income.
“No tax returns” does not mean “no documentation.” Income is still documented. The lender reviews statements, removes transfers between your own accounts, and often applies an expense factor to business deposits. Scotsman Guide describes this method for self-employed borrowers, with 12 to 24 months of statements and a 50% expense factor given as an example. Treat that factor as an illustration. Each program sets its own, and a lower factor generally needs third-party support such as a CPA-prepared profit and loss statement.
The “H” in HELOC also matters. Many big banks will not write a line on a rental at all. Investment-property lines come from non-QM channels, which are lenders that write loans outside standard bank guidelines. A broker with access to several wholesale lenders exists mostly to find those few that do.
How Does a Bank Statement HELOC Differ From a DSCR Loan?
They answer different questions. A bank statement line asks whether you can carry the debt. A DSCR loan asks whether the property’s rent covers its own payment.
DSCR stands for debt service coverage ratio. It is monthly rent divided by the monthly principal, interest, taxes, insurance, and any HOA dues (together, PITIA). A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. Your personal income barely enters the picture. Our complete DSCR loans guide walks through the full mechanics.
| Factor | Bank statement HELOC | DSCR cash-out refinance |
|---|---|---|
| What gets tested | Your deposits, credit, debt load | The property’s rent vs. its payment |
| Existing first mortgage | Stays in place | Replaced by the new loan |
| Typical leverage | 70% combined on investment property | Around 75% on a cash-out |
| Credit | 700 minimum on investment lines | 620 floor in parts of the network; around 660 common |
| Title | Individual or revocable trust | LLC allowed, per program terms |
| Structure | Revolving line, floating | Closed-end loan, fixed structure typical |
Notice the credit row. The line is stricter on credit than most DSCR programs. Also notice the first mortgage row. A line leaves your current first loan alone, which matters if that loan is low-cost and you would rather not replace it.
What Do Investment-Property Lines Look Like on the Network?
Across the wholesale lenders Lendmire works with, investment-property lines follow a tight box. These are typical guideline ranges, and every file is reviewed individually.
- Leverage: 70% combined loan-to-value (CLTV) on an investment property. Combined means your first mortgage plus the new line, measured against value. Credit above 700 buys eligibility, not extra leverage.
- Credit: 700 minimum. There is no tier below it for investment properties.
- Line size: $25,000 to $500,000 on an investment property. Larger lines exist only for primary residences.
- Structure: a 5-year interest-only draw period, then a 25-year fully amortizing repayment period. Pricing floats the whole way and does not convert to fixed.
- Draw at closing: at least 75% of the line is drawn when you close.
- Debt load: 50% maximum debt-to-income, qualified on the interest-only payment at the full line amount.
- Valuation: lines at or under $500,000 ordinarily use an automated valuation with no traditional appraisal. You can still request a full appraisal.
- Lien position: the line can sit in first or second position.
- Exposure: a borrower is limited to three lines, and an owner with more than 15 financed properties is not eligible.
Two points deserve a second look. First, the 75% draw requirement. If you pictured a line you open and leave idle until a repair or a down payment appears, this structure works differently. Most of the money is borrowed on day one.
Second, the payment arc. During the draw period you pay interest only. When repayment starts, the balance amortizes over 25 years, and the payment steps up. The CFPB explains the draw-then-repayment design and the risk of losing the property if payments are missed. Its HELOC booklet adds that variable rates and fees deserve a close look before you commit.
Which Rentals Are Eligible?
Eligible property types are single-family homes, 2-4 unit properties, PUDs (planned unit developments), townhomes, and condominiums, including non-warrantable ones. That covers most of what Dallas-area landlords own.
Not eligible: manufactured homes, co-ops, condotels, log homes, commercial or mixed-use property, and agricultural zoning. Texas properties are also limited to 10 acres. A property listed for sale, or listed within the past 60 days, is ineligible in Texas.
Credit history rules apply too. A bankruptcy needs 4 years of seasoning from discharge or dismissal. On investment files, a foreclosure needs 7 years, and a deed-in-lieu, pre-foreclosure, or short sale needs 4.
Does an LLC Kill the Deal?
For this product, yes. Title must be held by an individual borrower or an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title.
This is the sharpest structural difference from a DSCR loan, which accepts entity ownership subject to program terms. Many Dallas investors hold rentals in LLCs for liability reasons. If yours is deeded to one, you have two workable paths:
1. Change the vesting. Moving title out of the LLC has legal and insurance consequences. Talk to your attorney and insurer first.
2. Use a DSCR cash-out instead. It keeps the LLC intact and tests the rent, though it replaces your first mortgage.
Neither path is wrong. The right one depends on how much the existing first loan is worth keeping.
Does Texas Homestead Law Touch a Dallas Rental?
Not for the rental. It does touch your own home.
Texas A&M’s Real Estate Research Center explains that Section 50(a)(6) of the Texas Constitution governs home equity loans, and that these loans may not be taken on a secondary residence or a rental or investment property. So the state’s homestead limits, including the 80% combined cap and the one-loan-at-a-time rule, apply to your primary residence only. Rentals and second homes are treated as non-homestead transactions.
| Situation | Dallas primary residence | Dallas rental |
|---|---|---|
| Texas homestead rules | Apply | Do not apply |
| Combined LTV | Capped at 80% by state law | 70% network ceiling on investment lines |
| One equity loan at a time | Yes | No |
| Waiting period before closing | Yes | No |
| Seasoning requirement | 12 months on primary | Not applied to rentals |
Many owners assume the 80% cap and the one-lien rule follow them to every property. They don’t. The practical upshot: a line on your rental does not use up the single equity-loan slot on your own home.
This product is available only in Lendmire’s 16 full-service states, which is narrower than the 41-market DSCR footprint. Texas is one of the 16.
What Does a Real File Look Like?
Run the numbers in percentages. Say you own a Dallas-area duplex titled in your name. Your first mortgage balance sits at 50% of the property’s value. The 70% CLTV ceiling leaves room for a line worth up to 20% of value, capped at $500,000 whatever the property is worth.
Now change one thing. Your first mortgage is at 65% of value. The same ceiling leaves only 5% of value for the line. That may fall short of the $25,000 minimum, depending on the property. The equity test fails before income or credit even gets a look.
The strongest files pass two tests at once: enough equity and enough borrower strength. Neither one rescues the other.
A rental can also sit in the opposite situation. It may carry plenty of equity while you fall short on credit or debt load. Then the DSCR route may fit better, because it leans on the property’s rent coverage instead of your personal profile. Clearing a 1.00 coverage ratio is where select DSCR programs start, and stronger ratios open better terms. A separate select-lender path goes below 1.00 with leverage and terms adjusted. Neither guarantees positive cash flow, since DSCR compares rent to PITIA only. Repairs, vacancy, management, and utilities sit outside the calculation.
What Does “Flexible Cash” Actually Mean Here?
The line is flexible in what you can fund and rigid in how it is built. Typical uses include repairs and upgrades on a rental, reserves for a new purchase, or a down payment on another property. Confirm with the program whether any use of proceeds is restricted.
Three practical points shape the flexibility:
- Most of it is drawn upfront. With at least 75% drawn at closing, you carry interest on most of the line immediately.
- Repayment starts later. The interest-only period lowers early carrying cost, but the amortizing period brings a larger payment.
- Pricing floats. Your payment can change with the balance and the market. Stress-test your cash flow against a higher payment before you draw.
Tax treatment can depend on how the funds are used and how the property is held; borrowers should keep clear records and speak with a qualified tax professional before relying on any deduction.
Many self-employed investors end up using both tools. A line on one property gives revolving access to equity, while DSCR loans handle purchases and refinances on others, where rent carries the file. The strategy works because the two products test different things.
Who Should Skip This Product?
Skip it if any of these describe you:
- Your rental is deeded to an LLC and you want to keep it there.
- Your credit profile sits below 700.
- Your debt-to-income ratio, measured at the full line amount, runs above 50%.
- Your property is a manufactured home, log home, or mixed-use building.
- You own more than 15 financed properties.
- Your rent is strong but your personal profile is thin. A DSCR loan is built for that file.
Also skip it if you need a line you can leave untouched. The 75% initial draw makes this a poor standby reserve.
How Do You Prepare Your Bank Statements?
Clean deposits make the income analysis simple. Messy ones invite questions. A few habits help:
1. Keep rental income in its own account. Don’t mix it with personal spending.
2. Gather every page. Include consecutive months for every account used. Missing pages stall reviews.
3. Label transfers. Moves between your own accounts are removed from income, so make them traceable.
4. Explain large one-time deposits. A sale or a loan is not income, and lenders will ask.
5. Check the first mortgage. Confirm your existing loan documents don’t restrict a second lien.
6. Pull your credit early. Reports must be no more than 90 days old at closing, with no rescores.
Key Terms Defined
CLTV (combined loan-to-value): Your first mortgage balance plus the new line, divided by the property’s value.
Draw period: The stretch when you can borrow from the line and pay interest only. On investment lines here it runs 5 years.
Expense factor: The percentage of business deposits a lender subtracts to estimate real income. Programs set their own.
Vesting: How title is held, such as an individual, a trust, or an LLC.
Non-QM: Loans that fall outside standard bank guidelines and are underwritten under their own program rules.
PITIA: Principal, interest, taxes, insurance, and association dues, the monthly obligation that rent is measured against in a DSCR loan.
Frequently Asked Questions
Can I use a bank statement HELOC on a rental held in an LLC?
Not on this network’s investment lines. Title must sit with you personally or in a revocable living trust. If the property is in an LLC, you can change the vesting or use a DSCR cash-out refinance, which accepts entity ownership subject to program terms.
Does Texas’ 80% combined cap apply to my Dallas rental?
No. The 80% cap is a homestead rule that governs a Texas primary residence. A rental is a non-homestead transaction, and the network’s investment ceiling is 70% combined loan-to-value, which may be lower than the homestead cap.
Do I still need documentation without traditional personal-income documentation?
Yes. Income is documented from bank statements, and the lender applies an expense factor to business deposits. The loan is reviewed on documented income under the applicable program, subject to lender guidelines. Credit, equity, and property rules still apply.
Will I need a full appraisal?
Usually not on an investment line. Lines at or under $500,000 ordinarily use an automated valuation. A higher combined LTV may require a second valuation, and you can request a full appraisal in any case.
Is a “DSCR HELOC” the same as a bank statement HELOC?
Not necessarily. The phrase is a market label that can describe a rent-qualified cash-out refinance, a closed-end second, or a revolving line. Always confirm the structure, the title requirements, and what the file actually tests.
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. For the qualifying details, see how to qualify for a bank statement HELOC against a rental property.
About Lendmire
Lendmire is a mortgage brokerage (NMLS# 2371349) arranging home equity lines of credit — primary-residence, second-home and investment-property lines — through a wholesale lending network in its 16 full-service states. Eligibility is determined by the lender on each file. 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. Scotsman Guide – Rev Up the Engine for Non-QM Lending
2. CFPB
3. CFPB – What You Should Know About Home Equity Lines of Credit (booklet)
4. Texas A&M Real Estate Research Center – What to Know About Home Equity Loans in Texas
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Bank Statement HELOC Requirements for Landlords Borrowing Against a Rental · Can You Get a Bank Statement HELOC With the Most Flexible Loan Options? · Bank Statement HELOC Requirements for a Single-Family Rental
Guides: Bank Statement HELOC in Dallas, TX · Bank Statement HELOC in Texas
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
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.