The Quick Read: Repayment starts on the day the draw period ends, and that date is written into your note. On the investment lines Lendmire places through its wholesale network, that is the end of year five, when interest-only payments give way to full principal-and-interest payments over 25 years.
- Investment lines top out at 70% combined loan-to-value (CLTV), subject to lender guidelines, with a 700 credit minimum.
- The maximum line on an investment property is $500,000, and the line is usually valued by an automated valuation rather than a full appraisal.
- The borrower holds title personally or in a revocable living trust, because an LLC cannot hold title on these lines.
- Pricing floats during both the draw and the repayment period, so the payment can move even when you draw nothing more.
- The payment step-up at year five is the main risk, so you plan for it on day one.
What Is an Investment Property HELOC?
A home equity line of credit (HELOC) is a revolving credit line secured by a property you own. On a rental, it is a standalone line that sits in first or second lien position behind any existing mortgage. You borrow against the equity, repay, and borrow again within the limit during the draw period.
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.
It differs from a DSCR loan in a basic way. A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. A HELOC is underwritten mostly on you: your credit, your debt-to-income ratio (DTI), and the equity in the property.
Availability is also narrower. Lendmire brokers these lines through select wholesale partners in 16 full-service states, which is fewer than its 41-market DSCR footprint.
Key Terms Defined
Draw period: the stretch when you can borrow from the line and pay interest only.
Repayment period: the stretch after the draw ends, when you can no longer borrow and the balance amortizes.
CLTV: combined loan-to-value, meaning all loans secured by the property divided by its value.
DTI: debt-to-income ratio, meaning your monthly debt payments divided by your monthly income.
DSCR: debt service coverage ratio, meaning a rental’s monthly rent divided by its monthly principal, interest, taxes, insurance and any HOA dues (PITIA).
Automated valuation: a computer-model estimate of value used in place of a full appraisal.
Interest-only payment: a payment that covers interest and leaves the balance flat.
What Are the Requirements on a Rental Property?
Investment lines run tighter than lines on a home you live in. Across the network, the core numbers for an investment property are:
- Leverage: 70% CLTV is the ceiling. Credit at 720 and credit at 700 both reach the same 70%, so a higher score buys eligibility, not extra leverage.
- Credit: 700 is a hard floor, with no tier beneath it.
- Line size: $25,000 up to $500,000 (the Michigan minimum is $10,000).
- DTI: 50% maximum, or 45% for scores from 600 to 679, which does not apply here because investment starts at 700. The line is qualified on the interest-only payment calculated on the maximum draw.
- Credit report: no more than 90 days old at closing, with a score keyed to the primary wage earner.
- Exposure: a borrower is limited to three lines, and an owner of more than 15 financed properties is not eligible.
- Derogatory history: a bankruptcy needs four years of seasoning from discharge or dismissal. Investment files follow a seven-year path for a foreclosure and four years for a deed-in-lieu, pre-foreclosure or short sale.
These are typical wholesale-network guidelines, not promises. Each file gets a full review.
Investment vs. Primary Residence
| Factor | Investment property | Primary or second home |
|---|---|---|
| Max CLTV | 70% | Up to 90% (720+ only) |
| Credit floor | 700 | 600 program floor (640 on second homes) |
| Max line | $500,000 | $750,000 (primary residence only above $500,000) |
| Draw/repayment | 5-year / 25-year only | 3/17 or 5/25 structures |
The 90% ceiling exists only at a 720 credit profile, and it never applies to a rental. Market-wide surveys of equity lines report other figures, but they describe the broader market and not this network.
Property and Title Rules
Eligible collateral includes single-family homes, 2-4 unit buildings, PUDs, townhomes and condominiums, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use and agriculturally zoned properties are not offered. In several states, a property listed for sale, or listed within the past 60 days, is ineligible.
Title is the sharpest difference from a DSCR loan. LLCs, corporations, partnerships, and irrevocable, blind or land trusts cannot hold title on these lines. A property already deeded to an LLC needs a vesting change first, or a DSCR cash-out refinance instead, subject to program terms.
How Does Underwriting Treat the Rental?
Underwriting runs in a fixed order, and each step can stop the file.
1. Equity and CLTV. The lender adds your existing mortgage balance to the new line and compares the total to the property’s value. On a rental, the total stays at or below 70%.
2. Credit. You need a 700 score, and the housing and tradeline history is reviewed across all financed properties.
3. DTI. Your income must support all your debts, including the new line sized at its maximum interest-only payment.
4. Valuation. An investment line caps at $500,000, so valuation almost always lands in the automated lane with no traditional appraisal. A borrower can still request a full appraisal, and a higher CLTV may require a secondary valuation.
5. Property and title. The property type is checked against the eligible list, and vesting is confirmed in your name or a revocable trust.
Rent matters, but differently than on a DSCR file. The line is a personal-income product, so the lender looks at how your whole debt picture holds up. A rental that covers itself helps your overall position. The line itself does not qualify on rent coverage.
Keep one distinction straight if you compare the two products. DSCR compares rent to PITIA only. Clearing 1.00 is not the same as positive cash flow, because repairs, vacancy, management, utilities and capital expenses sit outside that calculation.
What Does the Draw Period Look Like?
On an investment line in this network, the draw runs five years, interest-only. At least 75% of the line is drawn at closing. That is a design feature, so the line works more like a mostly funded loan with a small revolving remainder than like free standby credit.
You can borrow more later up to the limit. One of the two wholesale programs states a $1,000 minimum for each later draw. Pricing floats across both the draw and the repayment period and never converts to fixed.
The CFPB’s HELOC explainer notes that some lines do allow converting part of a balance to a fixed rate, usually at a higher level than the variable one. That option is not part of this network’s investment structure, so ask before you assume it.
An interest-only payment never touches principal. The CFPB brochure on HELOCs says the same about interest-only plans in general. Five years of draws leave you owing the same balance you started with, or more if you borrowed again.
When Does Repayment Start?
Repayment starts when the draw period ends, not when the balance hits a number. On an investment line here, that is the end of year five. The note lists the exact date, so read it before you sign.
At that moment, three things change:
- You can no longer borrow.
- The payment recalculates to fully amortize the balance over the 25-year repayment period.
- Pricing keeps floating, so the new payment can still move.
Because the structure is fully amortizing, a balloon is not part of this design. The CFPB explainer notes that on some plans in the wider market, the full balance can come due when repayment begins, and that payments are often significantly higher once it starts. Check any other line you hold for that clause.
Here is the step-up in plain terms. A payment that covered interest only now also carries principal, so it rises even if pricing does not move. Picture a rental that covers its full monthly obligations at about 1.25x during the draw. If the repayment payment on your line jumps, your own coverage on that property can slide toward 1.00x or below. Whether you stay comfortable depends on your other income as well as the rent, since the line is underwritten on you.
What If You Pay Off or Pay Down Early?
You can pay down principal during the draw to shrink the balance before the recalculation. A smaller balance at year five means a smaller amortizing payment. Pay-off terms and any early-closure charges are in the contract, so confirm them before you draw.
What Are Your Options Before the Draw Ends?
You have four realistic exits, and the time to pick one is well before year five.
- Pay down. Use rental surplus or other savings to shrink the balance.
- Pay off. Clear the line from a sale or other proceeds.
- Refinance the line. Replace it with a new one, which means requalifying on credit, DTI and CLTV. Lendmire’s piece How to Use an Investment Property HELOC to Refinance an Older HELOC Entering Repayment covers that move.
- Move to a DSCR cash-out refinance. This replaces the line with a fixed-term first lien that qualifies primarily on property-level rental income, subject to lender guidelines. On standard rentals, cash-out generally tops out around 75% LTV, with about six months of seasoning commonly expected. Select programs start at 1.00 coverage, and a separate select-lender path goes below 1.00 with leverage and terms adjusted.
A DSCR loan has no repayment cliff because the term is fixed from day one, unlike a line, where the draw period eventually ends and repayment begins. Whether that beats revolving access depends on how long you need the money and how much payment shock you can absorb. The complete DSCR loans guide walks through the refinance side in more depth.
How Do You Stress-Test Vacancy and Repayment?
A rental that sits empty still owes the line payment. The line does not care whether the unit is leased. Test three things before you draw:
1. A vacancy. Can you cover the payment out of pocket if the unit is empty for a stretch?
2. A pricing move. Pricing floats and never converts to fixed on these lines, so test a meaningful increase.
3. The draw end date. Run your numbers on the fully amortizing payment, not just the interest-only one.
If the tests only work with the rent flowing, you are relying on the property to carry a personal debt.
Where the General Rule Breaks
Several edge cases catch investors who read only the headline numbers.
The name changes. BiggerPockets contributors say a lender may decline a HELOC on a rental yet offer a similar product under a different name. They also note a closed-end home equity loan exists that does not allow repeat withdrawals. Know whether the product revolves before you compare offers.
Opening a line before moving out. BiggerPockets hosts say investors often open a line on a primary residence before converting it to a rental. This is an anecdote and not a rule. On this network, occupancy at application sets the tier, and a primary residence has a higher CLTV ceiling than an investment property. Do not assume the primary-residence terms follow the property after you move out.
LLC-owned rentals. A property in an LLC cannot hold one of these lines. The fix is a vesting change or a DSCR cash-out instead.
A line above $500,000. It is primary-residence only and needs a full appraisal, so it never applies to a rental.
A property that is listed. In several states, a property listed within the past 60 days is ineligible, so a planned sale can rule out the line.
Frequently Asked Questions
Can you get a HELOC on an investment property?
Yes, but fewer lenders offer it, and the terms are tighter than on your home. On the wholesale network Lendmire uses, an investment line needs a 700 credit profile, stays at or below 70% CLTV and caps at $500,000. It is available only in Lendmire’s 16 full-service states, and each file is reviewed individually.
What happens if I owe more than the line allows at CLTV?
The line will not fund. Total debt on the property, including your existing mortgage and the new line, must stay at or below 70% CLTV. If your equity falls short, paying down the first mortgage or waiting for value to rise are the usual fixes, and a DSCR cash-out refinance is a separate route with its own leverage rules.
Does a full appraisal come with every investment line?
Not usually. A line at or below $500,000 ordinarily runs on an automated valuation, and every investment line falls under that cap. A borrower can request a full appraisal in any case, and a higher CLTV may call for a secondary valuation.
Can I hold the line in an LLC?
No. Title must sit with you personally or in an inter vivos revocable living trust. LLCs, corporations, partnerships and irrevocable, blind or land trusts cannot hold title. If your property is already in an LLC, it needs a vesting change first, or a DSCR loan may fit better, subject to program terms.
What should I do before the draw period ends?
Read the note for the end date and the repayment amortization. Run the fully amortizing payment against your income, and test a vacancy. Decide whether you will pay down, refinance the line or move to a DSCR cash-out refinance well before year five.
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. Call 828-256-2183 or request a quote to start.
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
2. CFPB – What You Should Know About Home Equity Lines of Credit
3. BiggerPockets – HELOC for Investment Property (forum)
4. BiggerPockets – Rookie Reply 613
This article is part of Lendmire’s investment property HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Get an Investment Property HELOC If the Home Will Be Listed Soon? · How to Qualify for an Investment Property HELOC on a Delisted Rental · Can You Get an Investment Property HELOC Without Their Spouse on the Loan?
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.