The Quick Read: Not directly, because a DSCR HELOC through Lendmire’s wholesale network is a revolving line with a variable rate, so the payment moves and cannot be locked in advance, though the rent can qualify the line and the first mortgage you keep stays untouched. A landlord who needs a payment that never changes should look at a closed-end structure instead. Those are covered below.
- The line is reviewed on the property’s rent, not your personal income, subject to underwriting.
- It is a standalone second lien behind your first mortgage, or a standalone first lien on a paid-off rental.
- The rate is variable, and the payment steps up when the repayment period begins.
- Fixed payments usually come from a closed-end second lien or a DSCR cash-out refinance.
- Offered through select programs in a limited number of states, subject to underwriting.
Why a Line of Credit Rarely Gives You a Fixed Payment
A line of credit is built to flex. You borrow, repay, and borrow again, so the lender prices it to move. The CFPB explains that home equity lines usually carry a variable rate, and that some lenders let you convert part or all of the balance to a fixed rate. That fixed rate is typically higher than the variable one, but it is more predictable.
Some lenders do offer a lock. A NerdWallet survey of 30 lenders found 21 that let consumers lock a fixed rate. That survey covers lines on a primary home, not rentals. The picture on rental collateral is different, and the DSCR HELOC Lendmire places is variable-rate for the life of the line. Plan on that, not on a lock.
So the honest answer is split. The rent-qualified line is real. The fixed payment is not part of its design.
What a DSCR HELOC Actually Is
A DSCR HELOC is a revolving line secured by a rental you keep. The debt service coverage ratio (DSCR) is the property’s rent divided by the payment the lender tests it against. Here, rent qualifies the line instead of your tax returns, W-2s, pay stubs or personal debt-to-income ratio. The rent, the lease, your credit report and the property valuation are all documented. Qualification runs primarily on property-level rental income covering the payment, subject to lender guidelines.
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.
The line comes in two shapes:
- Standalone second lien. It sits behind the first mortgage you keep. You do not refinance that loan, which matters if its terms are good.
- Standalone first lien. It sits on a rental with no mortgage.
It is never a third lien, never closed together with a purchase, and never placed on your own home or second home. Your LLC can stay on title, subject to program terms. The members sign as guarantors, and a title holder who is not a borrower signs an acknowledgment and the security instrument.
For the full picture of how rent-based lending works, see Lendmire’s complete DSCR loans guide.
How the Coverage Test Works
The minimum on this line is 1.10x. Gross monthly rent is divided by a qualifying payment. That payment is a fully amortizing payment on the entire credit limit, calculated at the start rate plus 2 percentage points. Think of it as a stress test.
You may see 1.00x described as a common baseline on DSCR purchase and refinance loans. That benchmark belongs to those programs. It does not apply to this line, where 1.10x is the floor.
Two details trip people up. First, the whole limit counts, even if you draw less. Second, the stress payment is higher than what you would owe on an interest-only draw. A line can look comfortable in real life and still land close to the minimum on paper.
Rent is the lesser of the appraiser’s market rent (Form 1007) or your lease. A lease above market can count with three months of receipts. A lease must be in place, and a two-to-four-unit property can have at most one vacant unit.
On a second lien, the lender’s own coverage calculation governs whether the first-mortgage payment joins the test. Ask for that calculation early. It changes the answer on a heavily leveraged rental.
How Much Can You Pull?
Leverage depends on lien position and credit. Every figure below is a ceiling, subject to underwriting.
On a second lien behind your first mortgage, combined loan-to-value (CLTV) is the first mortgage balance plus the new line, divided by value. It runs up to 70% CLTV at a 720 score or better, on lines from $50,000 to $500,000. There is no second-lien tier below 720.
On a first lien for a paid-off rental, loan-to-value (LTV) reaches 75% at 740 or better on lines to $500,000. It is 70% LTV from 700 to 739. Larger lines run to $1,000,000, and those carry a 65% LTV ceiling at 720 or better. Terms depend on the lender’s guidelines, the property type, the leverage, and a full review of the credit profile.
Picture a rental with a first mortgage at half its value. A second lien at 70% CLTV leaves about twenty points of value to work with. A property with a first mortgage near 65% leaves very little. Sort out the first loan’s balance before you chase the line.
Some flags lower the ceiling. A declining-market flag takes 5 points off, and Philadelphia lines carry a ceiling 10 points lower.
The Draw Rules and the Payment Reset
This is where fixed-payment landlords get surprised. The program’s structure runs like this:
- At least 80% of the line, and never less than $50,000, is drawn at closing.
- Later draws are at least $5,000 each.
- The draw period is 5 years, interest-only on the drawn balance.
- Repayment is a 25-year fully amortizing period, within a 30-year maturity.
When the draw period ends, the payment starts paying down principal, so it steps up. The CFPB’s guidance describes the same shift for lines in general. Rent usually holds steady across a lease term, while a floating payment does not. Model the post-draw payment against your rents before you borrow, not after.
Because the rate is variable, the payment can change even if you never draw again. That makes the line a poor fit for permanent debt on a thin-margin property. It fits better as flexible capital for a rehab, a bridge, or a down payment on the next deal, with a clear exit.
Lendmire’s piece Rental Property HELOC Interest Only Draw Period for Cash Flow Landlords goes deeper on that stretch.
What Gives You a Fixed Payment Instead
Three structures, side by side:
| Factor | DSCR HELOC | Fixed second lien | DSCR cash-out refinance |
|---|---|---|---|
| Payment | Variable | Fixed, closed-end | Fixed options exist |
| Lien | Second or first | Second | Replaces first |
| Your first mortgage | Stays | Stays | Paid off |
| Funds | Draw as needed | One lump sum | One lump sum |
| Best for | Flexible capital | Predictable payment | Permanent leverage |
A closed-end second lien pays out once and amortizes on a set schedule. The CFPB notes that a home equity loan delivers a lump sum, while a line’s payment varies with the balance. Lendmire’s article on a fixed-payment home equity loan on a rental covers that path.
A DSCR cash-out refinance replaces your first mortgage with a new loan, so you give up the old loan’s terms. If you hold a low-cost first mortgage, that tradeoff is the whole decision. If your first loan is already expensive, the refinance may be cleaner.
Read the decision this way:
- You want one fixed payment and a lump sum. Look at a closed-end second lien or a cash-out refinance.
- You want to keep a good first mortgage and don’t mind a floating payment. The line fits.
- You want flexibility now and a fixed loan later. Use the line as short-term capital, then refinance into fixed debt when the work is done.
Choosing between a fixed loan and a line is a toss-up for many landlords. A fixed payment is peace of mind, but a line lets you borrow only what you use after the first draw. The right answer depends on whether your rents can absorb a payment that moves.
Can the Line Ever Be Fixed?
On some consumer lines, yes. Bankrate reports that a lender may limit how many times you can lock and may require a minimum balance to switch. It also says fixed-rate HELOCs may carry higher fees and higher rates. The part you lock becomes a loan and starts paying down principal. The rest of the line stays variable, and you pay both.
A lock like that adds a second payment to your coverage math. That is one more reason to ask how a lender counts it.
On the rental line Lendmire places, the rate is variable and that is the product. If a lender tells you a rental line can be fixed, ask three questions. Does it lock the whole line or just a portion? What is the minimum balance to lock? How does your coverage ratio treat the locked piece and the floating piece together?
The label also varies. Some lenders won’t call a rental product a HELOC but will offer a line of credit secured by investment property. Compare the structure and the underwriting basis, not the name.
Who Is Eligible, and What Is Not
The program is for U.S. citizens, permanent residents and non-permanent residents with a Social Security number. Foreign nationals and ITIN borrowers are not eligible.
On credit and history:
- 720 minimum on a second lien, 700 on a first lien, using the lender’s own credit report.
- No 30-day mortgage late in the last 12 months.
- 48 months since a bankruptcy, foreclosure, short sale or deed-in-lieu.
- No reserves and no cash to close required.
- At most 5 loans or $2,500,000 per borrower with the program.
On the property, single-family, PUD, townhome, two-to-four-unit, and warrantable condominium rentals are eligible. Non-warrantable condominiums are eligible too, and lots to 10 acres qualify. Rural-designated property, row homes, condotels, commercial or agricultural property, leaseholds, land trusts, age-restricted communities, hobby farms, modular and log homes, land contracts and mixed-use are outside this lane. So is a property listed for sale in the prior two months or one with a solar lien.
Seasoning matters. A rental bought or refinanced in the last 6 months is not eligible, and the line requires 6 months of ownership. That rule trips up investors who finish a rehab and want to pull equity right away.
How the Property Gets Valued
Lines up to $400,000 use an automated valuation with a property inspection report, or a full interior appraisal. Larger lines need a full interior appraisal. Appraisal waivers are not accepted.
If you just finished a rehab, an automated model may not capture the new value. A full appraisal is the safer expectation. A rehab may support a higher appraised value, depending on comps and underwriter review. That is not a promise of a bigger line.
Your existing first mortgage matters too. Read its documents for any language limiting a second lien. A hazard policy must cover both liens, with flood coverage where required.
Risks Worth Sizing Before You Borrow
A variable payment and a rent that is set for a lease term make an uneasy pair. Stress-test the line at a higher payment than you expect. If coverage slips below break-even in that case, the line is the wrong tool.
Over-leverage is the other risk. A second lien stacks on top of the first, so your combined position matters more than either loan alone. A vacant unit or a soft lease renewal hits harder when two payments are due.
On this line, 1.10x is the floor, and a property that does not reach it is a different conversation with a different program. Whether any file qualifies depends on the property, the credit profile and the lender.
Tax treatment varies; consult a qualified professional.
Key Terms Defined
HELOC: A revolving line of credit secured by property, which you can borrow against, repay, and borrow again during the draw period.
Draw period: The stretch when you can borrow from the line. On this program it is 5 years, interest-only on the drawn balance.
CLTV: Combined loan-to-value, meaning the first mortgage plus the new line divided by the property’s value.
Second lien: A loan that sits behind your first mortgage and is paid after it if the property is sold or foreclosed.
Seasoning: The time a lender requires since your last purchase or refinance before it will lend against a property. Here it is 6 months.
DSCR: Monthly rent divided by the qualifying payment. This program asks for at least 1.10x.
Frequently Asked Questions
Can I lock a fixed rate on a DSCR HELOC on my rental?
Not on the line Lendmire places through its wholesale network. The rate is variable, and the payment can change even if you stop drawing. If you want one payment that never moves, look at a closed-end second lien or a DSCR cash-out refinance instead.
Does my LLC have to come off title?
No. The program allows the line to be vested in your LLC on investment property, subject to underwriting. The borrowers on the line need not be the same as the borrowers on your first mortgage.
Will I need tax returns or pay stubs?
No. The line qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. The lender still documents your lease, the market rent, your credit report and the property valuation.
Can I use this on my own home or a second home?
No. The line is for non-owner-occupied one-to-four-unit rentals only. A home equity line on a primary residence is a different, owner-occupied product with different rules.
What happens when the draw period ends?
Repayment begins and the line stops accepting draws. Payments become fully amortizing over 25 years, so the payment steps up compared with the interest-only draw period. Test that payment against your rents before you commit.
Where to Go From Here
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. Programs change, and every file is underwritten individually. Nothing here is a commitment to lend.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker. Home equity lines of credit — on a primary residence, a second home or an investment property — are arranged through wholesale lenders in Lendmire’s 16 full-service states, and every line is underwritten by the lender under its program guidelines. The DSCR HELOC described here is offered in 15 of Lendmire’s 16 licensed states, every licensed state except Tennessee. 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. CFPB: What Is a Home Equity Line of Credit HELOC
2. NerdWallet: Fixed-rate HELOC
3. CFPB Ask: HELOC vs home equity loan
4. Bankrate: HELOC with a fixed-rate option
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 When Rental Income Qualifies You Instead of Personal Income · DSCR HELOC vs DSCR Cash-Out Refinance on a Rental Property for Landlords · DSCR HELOC Requirements With 30% Equity in the Property
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.