The Quick Read: Yes, with conditions: select lenders in Lendmire’s wholesale network offer a home equity line on a non-owner-occupied one-to-four-unit rental that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, written as a standalone second lien behind your mortgage or a first lien on a paid-off rental, and available in 15 states.
- The rent qualifies the line. Your personal income is not calculated, and no traditional personal-income documentation, W-2s or pay stubs are requested.
- A second lien tops out at 70% combined loan-to-value on a rental, at a 720 credit score or better.
- A first lien on a rental with no mortgage reaches 75% loan-to-value at 740 or better.
- Your LLC can hold title, subject to program terms.
- The rental must be owned at least 6 months, and it needs a lease in place. These specifics are subject to lender guidelines and a full review of property, leverage, and credit.
You keep your existing first mortgage. You do not refinance it. That is the whole appeal.
What Exactly Is a DSCR HELOC?
A DSCR HELOC is a revolving line of credit secured by a rental you keep. The debt-service coverage ratio (DSCR) is the rent divided by the payment, so the property’s income, not yours, drives lender review. The structure is a standalone second lien or a standalone first lien.
The label gets used loosely, so ask what you are really being offered. Some lines sold as investment-property HELOCs qualify on your credit, your debt-to-income ratio and your equity instead. Those can be good products. They are just a different test. A DSCR cash-out refinance is a third thing: a new first mortgage that replaces your old one.
What the DSCR line is not:
- A line on your own home or a second home. Those are owner-occupied products, and this one is never written on them.
- A line closed together with a purchase.
- A third lien behind two other loans.
Lendmire’s complete DSCR loans guide covers the wider family of rent-qualified loans if you want the big picture first.
How the Rent Test Works
The lender divides gross monthly rent by a qualifying payment, and the result must reach at least 1.10x. That is the minimum on this program, subject to underwriting.
Here is the twist. The qualifying payment is not what you will owe on day one. It is a fully amortizing payment on the entire credit limit, calculated as a stress test rather than on your actual balance. Think of it that way: you might draw 80% of the line, but the test assumes you drew all of it and repaid it over time.
Which rent counts? The lesser of two numbers:
- The appraiser’s market rent on Form 1007, the rent schedule form.
- The rent in your lease. A lease above market counts only with three months of receipts.
A lease in place is required. A two-to-four-unit building can have at most one vacant unit. A property run on nightly bookings with no lease does not fit this lane. (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, the lender’s own coverage calculation decides whether your first-mortgage payment joins the test. Lenders differ, so do not assume either way.
Picture a duplex whose two leases sit right at market rent. Rent that clears the stress payment with a little room, say 1.2x, passes. Rent that lands at 1.05x does not, even though the real payment may feel manageable. The stress payment is what the lender measures. All qualifying math here is illustrative, and the lender’s calculation governs.
Clearing the ratio also does not mean the property cash flows. The test ignores repairs, vacancy and management. It only compares rent to the payment.
How Much Can You Pull?
Two Tests, One Binding
Two tests run side by side: the rent test and the equity test. Whichever is tighter sets your line. Many landlords assume equity is the limit. In practice, a thin-rent property can fail on coverage while sitting on plenty of equity.
Combined loan-to-value (CLTV) counts every lien: your first mortgage balance plus the new line, divided by the property’s value. On a first lien there is no other loan, so it is plain loan-to-value (LTV). The ceilings below are for non-owner-occupied one-to-four-unit rentals, through select programs, subject to underwriting.
| Lien position | Credit score | Max leverage | Line size |
|---|---|---|---|
| Second lien, behind your mortgage | 720+ | 70% CLTV | $50,000–$500,000 |
| First lien, no mortgage | 740+ | 75% LTV | up to $500,000 |
| First lien, no mortgage | 700–739 | 70% LTV | up to $500,000 |
| First lien, larger line | 720+ | 65% LTV | over $500,000 to $1,000,000 |
Run a quick picture. Say your first mortgage balance equals 50% of the rental’s value. At 70% CLTV on a second lien, the most the line can add is 20% of value, assuming the rent test also clears. Higher existing debt shrinks that room fast. Below 720, there is no second-lien option on this program.
Two adjustments to know. A property in a market flagged as declining lowers the ceiling by 5 points. And hazard insurance must cover both liens, with flood coverage where required.
Line size starts at $50,000. At least 80% of the line, and never less than $50,000, is drawn at closing. Later draws are at least $5,000 each. So this is not a tool for borrowing a few thousand dollars here and there.
Who Gets Routed Elsewhere?
Plenty of good landlords land outside this lane. Here is the screening list we run in the network, roughly in the order it knocks files out.
Seasoning. A rental bought or refinanced inside the last 6 months is not eligible, and you need 6 months of ownership. Own it two months, and the door is closed.
Credit. The minimum is 720 on a second lien and 700 on a first lien. The tier comes from the lender’s own credit report. Expect no 30-day mortgage lates in the last 12 months. Expect a 48-month wait after a bankruptcy, foreclosure, short sale or deed-in-lieu.
Borrower status. U.S. citizens, permanent residents, and non-permanent residents with a Social Security number can apply. Foreign nationals and ITIN borrowers are not eligible here.
Exposure. The program caps you at 5 loans or $2,500,000 per borrower. A larger portfolio may need a different lender.
Property type. Single-family, PUD, townhome, two-to-four units and condominiums all fit, warrantable and non-warrantable, subject to underwriting. Lots run to 10 acres. Outside the program:
- Rural-designated property
- Row homes
- Condotels
- Commercial or agricultural property
- Leaseholds and land trusts
- Age-restricted communities
- Hobby farms, modular and log homes
- Land contracts and mixed-use
- A property listed for sale in the prior 2 months
- A property with a solar lien
Not on the exclusion list: reserves and cash to close. Neither is required.
Can the LLC Hold Title?
Yes. Vesting in your LLC is allowed on investment property, subject to program terms. The members sign as guarantors. If someone on title is not a borrower, they sign a non-borrowing owner acknowledgment and the security instrument. The borrowers on the line also need not be the borrowers on the first mortgage.
That flexibility is a real edge over personal-income equity lines, which commonly want the property in your own name or a revocable trust. Retitling a rental just to borrow against it can create its own headaches with the first-mortgage lender and your insurance. A line that accepts the LLC avoids that.
One more point on what the file looks like on paper. 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. Federal Regulation Z exempts credit extended primarily for a business purpose from most of its coverage, and the official commentary treats the opening of a business-purpose credit line the same way. Whether a given line is business purpose is the lender’s call, based on the facts. Do not assume.
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.
Richmond Hill, Wherever Yours Is
Three places share the name: a Georgia city, a neighborhood in New York, and a city in Ontario. The program is offered in 15 states, including Georgia, under Lendmire’s consumer licensing. It is not offered in Tennessee, and it is not available in New York or outside the U.S.
If your rental is in Richmond Hill, Georgia, the program is available in your state, and the rest of this page applies as written. The eligibility rules above do not change by neighborhood. What does change is the rent figure: the appraiser’s market-rent opinion, set against your lease, drives your coverage number. For related reading, see Lendmire’s piece Investment Property HELOC for Richmond Hill Landlords Tapping Equity.
Line, Cash-Out Refinance or Personal-Income HELOC?
Three tools reach equity. Each judges you differently.
| Factor | DSCR HELOC | DSCR cash-out refinance | Personal-income HELOC |
|---|---|---|---|
| What it is | Revolving second or first lien | New first mortgage | Line on rental, personal test |
| Main test | Rent vs. stress payment | Rent vs. full new payment | Your credit, DTI, equity |
| Your first mortgage | Stays in place | Replaced | Stays in place |
| Your personal DTI | Not calculated | Not the main test | Counts every financed property |
| LLC title | Allowed | Allowed, per program | Often must be personal or trust |
Choose the line when your first mortgage is a keeper and you want cash in stages, such as rehab invoices or a down payment. Choose the cash-out when you want one lump sum, a reset of the whole loan, or a larger amount than the line limits allow. The cash-out also tends to need a full appraisal with a market-rent opinion and a review of your reserves, and its leverage rules are a different program’s.
An investor with many financed properties and modest personal income can pass a rent-based test and fail a personal-income one. That is the main reason this product exists.
What Happens After Closing
The draw period runs 5 years, interest-only on the drawn balance. Then a 25-year fully amortizing repayment period begins, with a 30-year maturity. The rate is variable.
Those three facts shape your plan. During the draw period the payment is light. When repayment starts, it steps up, because you begin paying down principal. A rate that moves adds uncertainty on top.
Stress-test your own plan before you sign:
- What does cash flow look like if vacancy runs a few months?
- What if the variable rate rises while you hold a large balance?
- What is your exit when the draw period ends: pay down, refinance into a long-term loan, or sell?
A common sequence is to use the line for a rehab or a down payment, stabilize rents, then refinance into a long-term DSCR loan. It works well when rents rise. It strains when they do not.
Rehab timing matters too. Underwriters want a lease in place, so a unit under renovation without a tenant cannot support the rent test yet.
One pattern shows up often in files like these. Landlords come in sure that equity is the constraint, then discover the stress-payment test on the full limit is. A modest first mortgage, a clean lease and a tenant paying at or near market rent make for the smoothest files. Rent set well below market, a lease dated last week, or a vacant unit in a fourplex slow them down.
DSCR vs. conventional financing
There are two common ways to finance an investment property, and they qualify you differently — here’s how investors weigh them.
Why investors choose it
- Qualifies on the property’s rental income — no personal tax returns, W-2s, or pay stubs needed to document income.
- No personal debt-to-income ceiling to clear, so existing mortgages and obligations don’t cap your borrowing the same way.
- Can be closed in an LLC, keeping the property inside a business entity.
- Built for scaling — not held to the limit on number of financed properties that conventional financing applies.
- Underwriting centers on the deal: generally qualifies when the rent covers the payment, a 1.00x coverage ratio being a common baseline (confirmed in underwriting).
- Designed specifically for investment property, including long-term and, where the program allows, short-term rentals.
Where it’s strong
- Often the lowest ongoing financing cost for a buyer who fully qualifies on personal income — a fit for a first property or a cost-first purchase.
Trade-offs for investors
- Requires full personal income documentation and must fit within a debt-to-income limit — salary, existing debts, and other mortgages all count.
- Typically held in your personal name rather than a business entity.
- Caps how many financed properties you can carry, which can become a ceiling as a portfolio grows.
- Evaluates you as a borrower as much as the property, which usually means more paperwork.
How investors usually choose: a first or single property often optimizes for the lowest financing cost; portfolio builders often optimize for leverage, vesting in an LLC, and scaling past conventional caps. The right answer depends on your goals, the property, and current guidelines — both paths run through select lenders in Lendmire’s wholesale network, with eligibility and terms confirmed in underwriting.
When Not to Do This
Skip it if:
- You plan to hold the cash idle. You are paying for money you are not using.
- Your plan needs the rent to rise just to survive.
- Your credit sits under the floors, or the property is on the exclusion list.
- You would be borrowing against the rental to cover your own living expenses.
Think hard if the line would push combined leverage close to the ceiling. The variable rate means a plan that looks fine today can tighten later. This one’s a genuine judgment call. Some investors want the cushion of a revolving line. Others sleep better with a fixed lump sum and a clear payoff path.
Documents and Process
Expect the file to ask for:
- The current lease and proof of rent receipts where relevant
- Your credit report, pulled by the lender
- Entity documents if the LLC holds title
- Hazard insurance, plus flood where required
- A valuation, which depends on line size
Valuation works in two tiers. Lines to $400,000 use either 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. Appraisal waivers are not accepted.
Title work scales with size too. A full title policy applies on a first lien and on second liens above $400,000. Smaller second liens use an owner-and-encumbrance report.
Questions to ask any lender offering a “DSCR HELOC”:
1. Is this qualified on rent, or on my personal income?
2. Is it a first or second lien?
3. Does the coverage test use the full credit limit?
4. How long is the draw period, and what happens after?
5. Can my LLC hold title?
6. What property types are excluded?
The rate and the pricing terms come with the lender’s disclosures. Compare them in writing.
Key Terms Defined
CLTV (combined loan-to-value): Your first mortgage balance plus the new line, divided by the property’s value.
Second lien: A loan that sits behind your first mortgage in line for repayment if the property is sold or foreclosed.
Draw period: The stretch when you can borrow from the line and pay interest only on what you have drawn.
Seasoning: The minimum time you must have owned or refinanced the rental before this line is available.
Stress payment: The payment lenders use to test coverage, calculated on the full limit at a higher assumed rate than you start with.
Non-warrantable condo: A condominium project that falls outside standard project-approval rules, which some programs accept at lower leverage.
Frequently Asked Questions
Can I use a DSCR HELOC to buy another rental?
Yes, the cash can be used for a down payment on a different property. The line itself is not closed together with a purchase, so it must be in place first. The rental securing it needs 6 months of ownership. Underwriters will also look at where your down payment funds came from, so keep draws and transfers traceable.
Does a DSCR HELOC replace my first mortgage?
No. A second-lien line sits behind the first mortgage you keep, and the first loan is untouched. That helps when your existing first mortgage is one you want to keep. A cash-out refinance, by contrast, replaces it.
Will my other mortgages count against me?
The line qualifies primarily on property-level rental income covering the payment, subject to lender guidelines, and your personal debt-to-income ratio is not calculated. Your credit score and mortgage history still matter. Exposure is capped at 5 loans or $2,500,000 per borrower with the program.
What if my rent is too low to clear 1.10x?
Then the line will not qualify as structured. A smaller line lowers the stress payment, so asking for less can help. Otherwise a cash-out refinance on its own program may fit better.
Is a foreign national or ITIN borrower eligible?
Not on this program. It is open to U.S. citizens, permanent residents, and non-permanent residents with a Social Security number. Other DSCR loan programs may serve other borrower profiles.
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 mortgage broker, not the lender, and every file is underwritten individually. Programs change, and nothing here is a commitment to lend.
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.
Get Started
Ready to find the right loan for you?
See your offer in seconds. No credit pull, no obligation.
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. CFPB, Regulation Z §1026.3 Exempt transactions
2. eCFR, Supplement I to Part 1026
This article is part of Lendmire’s DSCR HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: DSCR HELOCs for Atlanta Landlords Tapping Rental Equity · DSCR HELOC for Charleston Landlords Borrowing Against Rent Income · Can You Get a HELOC Behind a DSCR First Mortgage?
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
Disclosures. The information presented in this article is general market commentary, not financial, legal, or tax advice. Lendmire is a mortgage brokerage (NMLS# 2371349) — not a direct lender or depository institution — and loan placement is subject to lender underwriting. Nothing in this content represents a commitment to lend. Loan terms, pricing, and program availability vary based on borrower qualifications, property characteristics, and state of subject property, and are subject to change at any time. Lendmire complies with Equal Housing Opportunity requirements. Consumer access: nmlsconsumeraccess.org.