The Quick Read: You qualify by settling one question first, whether you live in one of the units, because occupancy sets your leverage ceiling. Then you document typically 12 or 24 months of deposits as income, hold title personally or in a revocable trust, and keep combined leverage and your debt ratio inside program limits. Leases matter, but they prove occupancy and tenant history. They do not replace your deposits as the income test.
- You live in one unit: the duplex is reviewed as a primary residence, and CLTV can reach 90%, but only at a 720-or-better credit profile.
- You rent every unit: it is an investment line at a 70% CLTV ceiling, a 700 minimum credit score, and a $500,000 maximum line.
- Income comes from deposits: business accounts take an expense factor, and the program sets it.
- Title must be personal or a revocable trust. An LLC cannot hold it.
- DTI tops out at 50%, and it is measured on the interest-only payment at the maximum draw.
Which Duplex Are You Talking About?
The phrase “all other units leased” describes two different deals, and your loan terms depend on which one is yours. If you live in one unit and lease the other, the lender reviews the building as a primary residence. If you live elsewhere and lease both units, it is an investment property.
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.
Bank statements only change how income is documented. They do not change the loan type, the occupancy rules, or the property rules. That is why occupancy comes before anything else.
| Factor | Live in one unit | Rent every unit |
|---|---|---|
| Occupancy class | Primary residence | Investment property |
| Max CLTV | Up to 90% (720+ only) | 70% |
| Minimum credit | Varies by tier and program | 700 |
| Max line | Above $500,000 allowed | $500,000 |
| Draw structure | Two options | 5-year draw only |
Lower credit tiers on primary residences carry lower ceilings. Exact tiers depend on the lender and the program. Everything here is subject to lender guidelines and a full file review.
Lendmire is a mortgage broker. It places these lines through select wholesale partners and is never the lender. It describes the two partner programs here as the higher-leverage program and the longer-runway program, and each figure applies only inside its own program’s terms.
Key Terms Defined
Bank statement HELOC: a home equity line of credit where your income is documented from bank deposits instead of tax returns.
HELOC: a credit line you draw against home equity. The CFPB describes it as an open-end line with a draw period followed by a repayment period.
CLTV (combined loan-to-value): every loan on the property, including the new line, divided by the property’s value.
Expense factor: the share of business deposits the lender assumes goes to operating costs, so only the remainder counts as income.
Occupancy class: how the lender labels the property: primary residence, second home, or investment.
Lien position: whether the line sits first or second behind an existing mortgage.
DTI (debt-to-income ratio): your monthly debt payments divided by your qualifying monthly income.
AVM (automated valuation model): a computer-generated value estimate used instead of a full appraisal.
What Leased Units Prove, and What They Don’t
A lease shows the unit is occupied by a tenant, and it supports your occupancy story. It also helps explain the recurring rent deposits in your statements. What it does not do is become your qualifying income by itself.
A bank statement line tests you, the borrower, through your deposits. A DSCR loan tests the property by comparing its rent to its payment. Many investors blur the two.
Say you live in one unit of a duplex and rent the other. The lender classifies the building as primary residence because you live there. The tenant’s lease supports that picture. Your income still comes from the deposit analysis.
Say you rent both units and live elsewhere. The leases now describe an investment property, and the investment ceiling applies. Credit above 700 buys eligibility, not extra leverage, because 720 and 700 both reach the same 70% CLTV.
A vacant unit does not automatically sink a deposit-based file, because underwriting centers on you. It can still affect your occupancy story, your DTI, and how the property is reviewed.
How Deposits Become Qualifying Income
The lender builds your income from deposits in four moves. The formula is eligible deposits divided by the number of months, times one minus the expense factor, times your ownership share.
1. Pick the statement type. Personal, business, or both. The program sets the lookback, typically 12 or 24 months.
2. Strip out what isn’t income. Transfers between your own accounts, refunds, and loan proceeds come out. Those are not earnings.
3. Average what remains. Divide eligible deposits by the months reviewed.
4. Apply the expense factor on business accounts. Personal statements are generally not subject to this step. Business statements are. A common illustration is 50%, meaning half of eligible deposits count. That is an illustration, not a rule. The program sets the actual factor, and a CPA-prepared profit-and-loss statement or expense letter may support a different figure where the program allows.
Business bank accounts need a 680 minimum credit score for the deposit analysis. An investment line already floors at 700, so on a fully rented duplex the statement analysis is never the binding constraint. Your credit score and your CLTV are.
Now the landlord-specific trap: double counting. If you deposit tenant rent into the same business account that holds your other earnings, the lender must separate the two. Rent from a leased unit may count differently depending on the program. Some count part of it, and others rely only on your documented deposits. Either way, keep rent deposits identifiable. A dedicated account for rent makes the analysis cleaner and the underwriter’s questions fewer.
The Step-by-Step Qualification Path
1. Check title. The property must be held by you as an individual or by an inter vivos revocable living trust. A duplex already deeded to an LLC needs a vesting change first, or a different loan type.
2. Classify occupancy. Live in one unit, and it is a primary residence. Rent every unit, and it is an investment property.
3. Screen the property. Two- to four-unit buildings are eligible. On the longer-runway program, 2-4 units carry a 640 minimum credit score. Co-ops, condotels, log homes, manufactured homes, commercial, mixed-use, and agricultural-zoned properties are not offered.
4. Confirm credit. The program floor is 600, but investment lines start at 700. Primary residences at the top tier need 720. The report must be no more than 90 days old at closing, and rescores are not allowed.
5. Run income and DTI. The maximum DTI is 50%. Profiles from 600 to 679 are capped at 45%, and anything above 45% requires a 680 minimum. The payment counted is the interest-only payment on the maximum draw, not what you plan to draw.
6. Test CLTV. Take your existing first mortgage plus the new line, divide by the value, and compare to your ceiling.
7. Value the property. Lines at or below $500,000 ordinarily use an automated valuation, though a higher CLTV may call for a secondary valuation. A full appraisal is required above $500,000, and you can request one anyway.
8. Close and draw. At least 75% of the line is drawn at closing. The line is variable and never converts to fixed. After closing, subsequent draws carry a minimum of $1,000.
Sizing the Line
The line is the allowed CLTV times the value, minus your existing first mortgage. Work it in percentages.
Take an investment duplex with a first mortgage at 55% of value. At the 70% ceiling, the room for the line is 15% of value. If the first mortgage is at 65%, the room shrinks to 5%.
Now take a primary-residence duplex where you live in one unit, with credit at 720 or better. The same first mortgage at 55% of value leaves up to 35% of value under a 90% ceiling. Drop below the top credit tier, and that room narrows.
A line can sit in first or second position. On a paid-off duplex, it is the first lien. On a financed one, it sits behind the existing mortgage and leaves that loan in place. BiggerPockets describes a HELOC the same way: a second mortgage billed only on what you draw. For many investors, keeping a low-payment first mortgage is the whole reason to choose a line over a refinance.
Investment lines max out at $500,000. A line above $500,000 is primary-residence only, requires 700 credit or better (720 on the longer-runway program), caps at 75% CLTV, and requires a full appraisal.
Documents to Gather Before You Apply
- Statements: personal, business, or both, covering the lookback the program requires.
- Leases for each rented unit, signed and current.
- Mortgage statement for the first lien, so the lender can count the payment and CLTV.
- Proof of title showing you or your revocable trust as owner.
- Insurance on the building.
- A CPA letter or profit-and-loss statement, if you want to support an expense factor other than the program default.
- A clean explanation for any large non-income deposits, such as transfers, refunds, or sale proceeds.
Where the Rule Breaks
Banks versus non-QM channels. Many banks decline rental collateral. NerdWallet reports that typical bank investment HELOCs ask for credit around 720 or higher and cap LTV at about 80%. Those are market-wide figures. On Lendmire’s network, an investment line caps at 70% CLTV with a 700 minimum.
LLC title. Most bank lines will not lend to an LLC. Lendmire’s wholesale programs do not allow it either: LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title. That is the sharpest structural difference from a DSCR loan, which can generally close in an LLC, subject to program terms.
Exposure limits. A borrower is limited to 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.
Credit history. A bankruptcy needs 4 years of seasoning from discharge or dismissal. Foreclosure history is seasoned 7 years, and a deed-in-lieu, pre-foreclosure, or short sale 4. On primary residences, one program declines foreclosure-family history entirely, regardless of age.
Listed properties. A property listed for sale, or listed within the past 60 days, is ineligible in some states.
State availability. Lendmire places HELOC files in 16 states, which is narrower than its 41-market DSCR footprint, so confirm your state early.
Risk of the product itself. A HELOC is secured by your home. The CFPB’s HELOC explainer notes that failing to repay can put your home at risk. (A variable payment on a balance you drew for a down payment is a real exposure, not a footnote.)
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.
When a DSCR Loan Fits Better
Pick a line when your weakness is tax-return income and you want to keep an existing first mortgage. Pick a DSCR loan when the building’s rent is the strong part of the file and your personal income is the weak one.
A DSCR loan is reviewed primarily on property-level rental income covering the payment, subject to lender guidelines. It suits a duplex that is fully rented and held in an LLC, or one you want to refinance into a fixed payment. Purchase leverage typically lands at 75% to 80% LTV, with select high-leverage programs reaching 85% at roughly a 700-plus score. Cash-out tops out around 75% LTV, with about 6 months of seasoning common. Coverage of 1.00 is where select programs start, and stronger ratios open better terms. A separate select-lender path takes coverage below 1.00 with leverage and terms adjusted.
Clearing 1.00 is not the same as positive cash flow. Repairs, vacancy, management, and utilities sit outside the calculation.
The complete DSCR loans guide walks through those mechanics. Lendmire’s article Best Bank Statement HELOC Program With All Other Units Leased covers how a broker matches your file to a lender. The best program depends on your occupancy, credit, leverage need, and documentation.
Mistakes That Stall Files
- Assuming a rented duplex is automatically an investment property. If you live in one unit, it is not.
- Treating the 50% expense factor as law. It is an illustration.
- Mixing rent into a general business account. It muddies the deposit analysis.
- Applying with the deed in an LLC. Fix title first.
- Expecting higher credit to raise investment leverage. At 700 and above, the ceiling is the same.
- Believing bank statements mean fewer checks. The lender still verifies the money coming in, plus credit, title, equity, and property.
Frequently Asked Questions
Do all the other units have to be leased?
No. A deposit-based line tests your income, not the building’s occupancy. Vacancy can still change how the property is reviewed and what your deposits look like, so leases on every rentable unit make the file cleaner.
Can I qualify if the duplex is in an LLC?
Not as it stands. Title must be held by you personally or by an inter vivos revocable living trust. A property already deeded to an LLC needs a vesting change, or a DSCR cash-out instead.
How many months of statements will I need?
Typically 12 or 24 months, and the program sets which. Business statements take an expense factor. Personal statements generally do not.
Does my first mortgage have to be refinanced?
No. The line can sit in second position behind your existing mortgage. That mortgage counts toward your CLTV and your DTI.
Will a higher credit score give me more leverage on a fully rented duplex?
Not above 700. On an investment line, 720 and 700 reach the same 70% CLTV. Credit above 700 improves eligibility, not the ceiling.
Next Steps
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. The brokerage shops select wholesale partners and matches the file to the program that fits.
Duplexes with a tenant next door and an owner upstairs sit in a gray zone that most lending rules weren’t written for, so the first call should settle occupancy before anything else.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage that arranges home equity lines of credit through wholesale lending partners in its 16 full-service states. Lines on primary residences, second homes and investment properties are each reviewed individually by the lender under the program’s occupancy, credit and combined-loan-to-value guidelines. 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
2. BiggerPockets – HELOC vs. cash-out refinance
3. NerdWallet
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 on a Home You Just Bought and Closed On · How to Qualify for a Bank Statement HELOC as a Retiree on Social Security · How to Qualify for a Bank Statement HELOC for Landlords Borrowing Against a Rental
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
Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.