The Quick Read: A borrower qualifies by documenting income through cleaned bank deposits, holding a credit profile that meets the program floor, keeping combined leverage inside the occupancy-tier ceiling, and owning an eligible property titled in their own name. The existing first mortgage stays in place when the line is placed in second position, but its balance and payment still count against the file.
- Income is built from 12 to 24 months of deposits, with transfers and one-off items stripped out.
- Credit starts at 600 on primary residences, 640 on second homes, and 700 on investment properties.
- Ceilings are occupancy-tiered: 70% CLTV on investment lines, up to 90% CLTV on second-home lines (90% only at 720 or better), and up to 90% CLTV on primary-residence lines (90% only at 720 or better).
- Title must sit with the individual borrower or a revocable living trust. An LLC cannot hold it.
- The line is available in Lendmire’s 16 full-service states only, which is narrower than the DSCR footprint.
Lendmire is a mortgage broker. It places these files with select wholesale partners and does not lend. Every figure below is subject to lender guidelines and full file review, and none is a commitment to lend.
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?
A bank statement HELOC is a revolving line of credit secured by real estate, where the borrower’s income is documented from deposits instead of tax returns. The line is open-end, which means the borrower can draw, repay, and draw again. The federal consumer-finance regulator’s HELOC explainer describes it that way and notes the draw period is followed by repayment, with variable pricing that changes the payment over time.
The product fits self-employed owners, 1099 earners, and business owners whose returns show little income after write-offs. It is reviewed on documented income under the applicable program, subject to lender guidelines. Underwriting still happens. It just reads a different set of documents.
On this network the line can sit in first or second lien position. That detail matters for anyone keeping a mortgage, and the next sections cover why.
Key Terms Defined
CLTV (combined loan-to-value): All liens on the property added together, divided by the property’s value.
Lien position: Where a loan sits in line for repayment. A second-position line is recorded behind the first mortgage.
Expense factor: A percentage the lender subtracts from business-account deposits to reflect the cost of running the business.
DTI (debt-to-income): Monthly debts divided by monthly qualifying income.
Subordination: A written agreement where a lender agrees to stay behind a new first mortgage.
Draw period: The stretch when the borrower can pull funds, usually interest-only here.
What Does the Lender Actually Test?
Four things decide the file: documented deposits, debt ratio, combined leverage, and property and title eligibility. A weak result in one can sink a strong result in another.
- Income: Averaged monthly deposits, cleaned and expense-adjusted where the account is a business account.
- Credit: A 600 floor for primary residences, 640 for second homes, 700 for investment properties. The score model is single-bureau, keyed to the primary wage earner. The report can be no more than 90 days old at closing, and rescores are not allowed.
- DTI: 50% maximum, 45% for scores from 600 to 679. Anything above 45% needs a 680 minimum. The test runs on the interest-only payment calculated on the maximum draw, not on what the borrower actually pulls.
- Leverage and property: Covered in the next sections.
That DTI detail trips borrowers up. A borrower who plans to draw only half the line is still tested as if the full line were drawn.
How Does Keeping Your First Mortgage Change the Math?
The first mortgage stays untouched, but it fills part of the leverage ceiling and its payment sits in the debt ratio. The federal consumer-finance regulator treats a home equity line on an already-mortgaged home as a second mortgage, paid in addition to the first.
Walk through the order of operations:
1. Take the property’s value.
2. Multiply by the CLTV cap for the occupancy and credit tier.
3. Subtract the first-mortgage balance.
4. What remains is the most the line can be, before the dollar cap for that tier applies.
Consider a primary residence with a 720+ score. The matrix allows 90% CLTV up to a $500,000 line, or 75% CLTV up to $750,000. A borrower with a large first mortgage may find the 90% tier leaves little room, while the 75% tier at a larger line size is out of reach because the first balance already eats most of it. Run both tiers before assuming the higher percentage helps.
Now the investment tier. It is the narrowest: 70% CLTV, a 700 minimum, and a $500,000 maximum line, whether the score is 700 or 720. A rental owner with a first mortgage at 60% of value has only 10% of value left for the line.
On the debt side, the first mortgage’s full payment goes into DTI alongside the line’s qualifying payment. A borrower with strong deposits can still fail on DTI if the first payment is heavy.
How Do Bank Statements Become Qualifying Income?
Deposits are reviewed over a lookback window, cleaned, adjusted, and averaged. They are not simply added up.
| Deposit type | Typical treatment |
|---|---|
| Customer or client payments | Counted |
| Transfers between your own accounts | Stripped out |
| Refunds and reversals | Stripped out |
| Loan proceeds | Stripped out |
| One-off large items | Stripped out or sourced |
The lender sets the expense factor, not the borrower. Some programs accept a CPA letter or P&L as an alternative, and the factor can differ between them. Personal-account deposits may be treated differently from business deposits.
The practical habit: pull 60 to 90 days of statements before the application and look for transfers that were never labeled.
Which Documents Does the File Need?
The file needs the statements, identification, proof of the first mortgage, and property and title documents. Missing pieces create most of the delays that borrowers blame on underwriting.
| Item | Status |
|---|---|
| Personal or business bank statements | Required |
| Current first-mortgage statement | Required |
| Proof of self-employment | Required |
| CPA letter or P&L | Situational |
| Trust documents | Situational |
| Explanation for large deposits | Situational |
Credit tradelines and housing history are part of the review too. One program in the network wants two tradelines seasoned 12 months, or one seasoned 24. Its housing history standard is 0x30x6 and 1x30x12 at 640 and above, and 0x30x12 from 600 to 639, applied across every financed property.
Which Property and Title Rules Apply?
Title is the sharpest structural line in this product. Fee simple or leasehold title must be held by the individual borrower or an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title.
That is a real difference from a DSCR loan. A rental already deeded to an LLC needs a vesting change before a line can be placed, or the borrower should look at a DSCR cash-out refinance instead. Moving title can carry its own consequences with the existing first mortgage, so review the terms of that mortgage before deeding anything.
Eligible property types are single-family, 2-4 units, PUDs, townhomes, and condominiums, including non-warrantable condos. Modular factory-built homes are eligible on one program only. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not eligible.
Occupancy changes the whole picture:
| Occupancy | Credit floor | Ceiling | Max line |
|---|---|---|---|
| Primary residence | 600 | 90% CLTV (720+) | $500,000 at 90% CLTV; $750,000 at 75% CLTV, 700+ (720 on the longer-runway program) |
| Second home | 640 | 90% CLTV (720+) | $500,000 |
| Investment property | 700 | 70% CLTV | $500,000 |
A primary-residence line above $500,000 requires a 700 or better credit profile (720 on the longer-runway structure), caps at 75% CLTV, and needs a full appraisal. Texas primaries are homesteads and cap at 80% combined, so the upper matrix tiers never apply there.
What Structures Exist?
Two wholesale programs sit behind this product, and each figure applies only within its own program. The higher-leverage program is the one that reaches 90% CLTV on primary residences and second homes. The longer-runway program carries the stricter tradeline standards and the modular-home allowance.
On primary residences and second homes there are two draw structures: a 3-year interest-only draw with a 17-year amortizing repayment, and a 5-year draw with a 25-year repayment. Tennessee shortens both. Investment lines run the 5-year/25-year structure only.
At least 75% of the line is drawn at closing on both programs. Pricing floats during the draw and repayment periods and does not convert to fixed. Line sizes run $25,000 to $750,000, with a $1,000 minimum on later draws after closing (Texas is $4,000).
Valuation is usually automated on lines at or below $500,000, though a higher CLTV can trigger a secondary valuation and the borrower may ask for a full appraisal. Every line above $500,000 needs one.
Exposure limits apply across the borrower’s portfolio. A borrower can hold three lines. Combined exposure caps at $2,000,000 on the higher-leverage program and $750,000 on the longer-runway program. A borrower with more than 15 financed properties is not eligible.
Where the General Rule Breaks
Refinancing the first later. A new first-mortgage lender will not close behind an existing line unless the line lender signs a subordination agreement, and that lender can decline. Plan the first mortgage’s future before adding a second lien.
A DSCR note that restricts junior liens. If the first mortgage is a DSCR loan, read the note before adding a line. Some restrict additional liens.
Derogatory history. A bankruptcy needs 4 years of seasoning from discharge or dismissal on both programs. On primary residences and second homes, one program seasons a foreclosure at 7 years and a short sale or deed-in-lieu at 4. The other declines that history regardless of age. Investment files follow the 7-and-4 path.
Sub-640 profiles. Under the longer-runway program these are limited to single-family residences with a clean 12-month housing history. Because second homes floor at 640 and investment at 700, this restriction reaches primary residences only.
Listed properties. A property listed for sale, or within the past 60 days, is ineligible in NC, PA, TN, TX, and WA. New Mexico and Ohio set a CLTV cap that depends on credit profile. Texas properties are limited to 10 acres, and Texas primaries carry a 12-day waiting period, a one-lien-at-a-time rule, and 12-month seasoning.
Few lenders write it. Large retail lenders typically do not offer a line in second position on investment property. A broker that shops several wholesale lenders can match the scenario to the program that fits, which a single lender cannot do.
Keep the Mortgage, Refinance, or Use DSCR?
The choice depends on which file is stronger and what the first mortgage is worth keeping. The CFPB notes that repaid balances on a line replenish, which helps repeat draws.
| Factor | Bank statement line | Cash-out refinance | DSCR cash-out |
|---|---|---|---|
| First mortgage | Stays in place | Replaced | Replaced |
| Income test | Deposits and DTI | Varies by program | Property rent vs. PITIA |
| Title | Individual or revocable trust | Varies | LLC allowed, subject to program terms |
| Pricing | Floats, never fixed | Varies | Varies |
A DSCR cash-out compares rent to the full monthly obligation and does not look at personal income. It tops out around 75% LTV across most of the network, with about 6 months of seasoning common. For investors who own rentals through entities, it is usually the cleaner route. The complete DSCR loans guide covers the investor alternative.
Why Files Get Declined
- DTI fails on the full-draw test. Fix: lower the line request or pay down debts first.
- Income shrinks after cleaning. Fix: document transfers and consider a CPA letter.
- Title sits in an LLC. Fix: change vesting or switch to a DSCR cash-out.
- First balance leaves no CLTV room. Fix: compare the tiers, since a lower percentage at a larger line size can behave differently.
- Credit below the occupancy floor. Fix: the investment tier needs 700, not 600.
- State or listing rules. Fix: check the 16-state footprint and the listing restrictions first.
Risks and Fine Print
Pricing floats and the payment moves with it. The draw-to-repayment shift can strain cash flow, and the CFPB warns that a borrower could lose the home if the line cannot be repaid. A second lien also complicates a later first-mortgage refinance, as covered above.
Frequently Asked Questions
Can I qualify without traditional personal-income documentation?
Yes, the income is documented from bank statements under the applicable program, subject to lender guidelines. Underwriting still applies: deposits are cleaned, expense-adjusted where relevant, averaged, and tested against debts.
Does the line replace my existing mortgage?
Not when it is placed in second position. The first mortgage keeps its terms, though its balance counts toward CLTV and its payment counts toward DTI. A first-lien line on a mortgaged property would pay the old mortgage off, so second position has to be specified at the start.
Can I use it on a rental I hold in an LLC?
No. Title must be held by the individual borrower or a revocable living trust. A property in an LLC needs a vesting change, or a DSCR cash-out refinance may fit better.
What is the highest leverage available on an investment property?
70% CLTV, with a 700 minimum credit score and a $500,000 maximum line. The 90% figure applies only to primary residences and second homes at 720 or better.
Is it available everywhere?
No. Lendmire places these lines in 16 states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA.
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. Lendmire’s comparison of bank statement HELOC programs shows how the choice depends on the borrower’s situation.
For current guidelines and terms, see Lendmire’s bank statement HELOC programs page.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges home equity lines of credit in its 16 full-service states through wholesale lenders, on primary residences, second homes and investment properties. Every line is subject to the lender’s guidelines and full underwriting. 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
2. CFPB: Home equity loan vs. HELOC
This article is part of Lendmire’s bank statement HELOC program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How to Qualify for a Bank Statement HELOC in Texas Without Refinancing · How to Qualify for a Bank Statement HELOC for Landlords Borrowing Against a Rental · How to Qualify for a Bank Statement HELOC for North Carolina Rental Owners
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
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.