The Quick Read: No single provider tops the list for every borrower, because the lenders that write a first-position line depend on occupancy, credit profile, line size, and how title is held. A line on a home with no mortgage records first by default, so the real question is which program fits your file. Lendmire is a mortgage broker, not a lender, and it matches files to select wholesale lenders.
- With no mortgage lien ahead of it, a new line on a paid-off home takes first position.
- Occupancy sets the ceiling: investment lines top out at 70% CLTV, while primary residences and second homes can reach 90% CLTV only at a 720-or-better credit profile.
- Title must sit with you personally or in a revocable living trust, not an LLC.
- HELOCs are underwritten on your credit and debt-to-income ratio, not on rent coverage.
- Lendmire’s HELOC availability covers 16 full-service states, which is narrower than its DSCR footprint.
Most people searching this phrase want a ranked list of company names. This page does not give one. Lenders change their programs often. The better question is which program matches your property, your credit, and your goal. A broker that shops several wholesale lenders can answer that for your file, and that is the angle here.
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 “First Position” Means on a Paid-Off Home
A lien is a legal claim against a property. Its rank comes from recording order, not from the product name. Nolo’s lien priority guide explains that liens generally follow “first in time, first in right.” The claim recorded first in the land records outranks later ones.
A paid-off home has no mortgage on record. So a new line recorded against it lands in first position among mortgage-type liens. There is no special “first-lien HELOC” species of loan. It is the same product, with nothing ahead of it.
That has one practical effect. On a home with a mortgage, a HELOC is a second mortgage. On a paid-off home, the line is the only lien. Your equity is the full value of the home, limited by the lender’s combined loan-to-value cap and a flat line-size cap.
Key Terms Defined
Free and clear: A property with no mortgage or other loan recorded against it.
First lien position: The claim recorded ahead of every other mortgage-type claim on the property.
CLTV (combined loan-to-value): All loans against the property, added together, divided by the property’s value.
Draw period: The stretch when you can borrow from the line, often paying interest only.
Repayment period: The stretch after the draw ends, when the balance amortizes down to zero.
Open-end line: Credit you can borrow, repay, and borrow again up to a limit. The CFPB’s HELOC explainer describes it this way.
Vesting: How title to the property is held, such as in your own name, in a trust, or in an LLC.
What Decides Which Provider Fits You
The right provider depends on five things. Get these clear before you ask anyone for a quote.
Occupancy. Is the home your primary residence, a second home, or an investment property? This sets the ceiling more than anything else. Across the wholesale programs Lendmire places files with, an investment-property line tops out at 70% CLTV. A primary residence or second home can reach 90% CLTV, but only at a 720-or-better credit profile. Never read a high-leverage headline as applying to a rental.
Credit. The programs set a 600 floor on primary residences, 640 on second homes, and 700 on investment properties. Higher scores open higher CLTV tiers. Subject to lender guidelines, a 720 profile on an investment property reaches the same 70% ceiling as a 700, so a jump from 700 to 720 does not buy more leverage there.
Line size. Lines run from $25,000 to $750,000. Anything above $500,000 is primary-residence only, so the 90% CLTV tier does not apply there. Those larger lines need a 700 or better credit profile (720 on the longer-runway structure described below), cap at 75% CLTV, and require a full appraisal. Investment lines and second-home lines top out at $500,000.
Title. Individuals and revocable living trusts can hold title. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot.
State. Lendmire’s HELOC placements cover 16 full-service states: AL, CA, CO, FL, GA, IN, MI, MT, NM, NC, OH, PA, TN, TX, VA, and WA. That is narrower than the 41-market DSCR footprint.
How Underwriting Treats a Paid-Off Home, Step by Step
Here is the sequence a file moves through. Every step is subject to lender guidelines and full file review.
1. Title check. The lender confirms nothing is recorded ahead of the new line. Any old mortgage must show as released.
2. Equity math. With no existing lien, the starting balance is zero. The line limit is the lender’s CLTV percentage of value, capped by the flat line-size limit. As the CFPB’s HELOC brochure puts it, equity is the home’s value minus what you owe. On a paid-off home, nothing is subtracted.
3. Credit and debt-to-income. The file is judged on you, not on the property’s rent. DTI tops out at 50% in these programs, with 45% for credit profiles from 600 to 679. A ratio above 45% requires at least a 680 score. The qualifying payment is calculated on the interest-only payment at the maximum draw.
4. Valuation. Lines at or below $500,000 ordinarily run an automated valuation with no traditional appraisal. A higher CLTV may require a secondary valuation. Every line above $500,000 needs a full appraisal, and you can request one in any case.
5. Credit report details. The score model is single-bureau and keys off the primary wage earner. The report can be no more than 90 days old at closing, and rescores are not available.
6. Closing and fees. The CFPB brochure notes lenders may charge fees such as appraisal and application fees. Ask for every fee in writing before you commit.
That is the whole flow. The paid-off status simplifies the equity math but does not skip the credit, DTI, or title steps.
Two Draw Structures You Will See
Lendmire brokers HELOC files through two wholesale program types, and their terms differ. Name the structure before you compare any figure.
The higher-leverage program reaches 90% CLTV on primary residences and second homes at 720 or better. It allows a borrower up to three lines, with combined exposure capped at $2,000,000 across those lines, while any single line stays within the $750,000 maximum.
The longer-runway program offers the longer draw and repayment periods, and caps combined exposure at $750,000.
On primary residences and second homes, there are two draw designs. One has a 3-year interest-only draw followed by a 17-year amortizing repayment. The other has a 5-year draw followed by a 25-year repayment. Tennessee shortens both to 3 years and 12 years, and 5 years and 10 years. Investment lines use the 5-year draw and 25-year repayment only.
Pricing floats through both periods and never converts to fixed. The CFPB says the repayment stretch is often ten or twenty years, which fits this pattern. Because the payment moves with the balance and the pricing, this is a bridging tool more than a permanent loan.
Where the “First Position” Rule Breaks
First position is not a promise of being paid first. Several edge cases matter.
Other claims can jump ahead. Nolo notes that property tax liens, mechanic’s liens, and HOA super liens can outrank earlier-recorded claims under state law. Nolo’s HOA super lien page says that in some states a super lien can outrank even a mortgage. A clean title search matters for that reason.
First position is not permanent. If you later refinance with another lender, the new lender may ask your HELOC lender to sign a subordination agreement. Without it, the new loan sits behind the line.
Vesting can block the file. An investor with a free-and-clear rental inside an LLC hits this wall. An LLC cannot hold title under these programs. A property already deeded to an LLC needs a vesting change first, or it points toward a DSCR cash-out instead.
Other limits sit in the file too:
- A borrower can hold up to three lines.
- A borrower with more than 15 financed properties is not eligible.
- Bankruptcy needs 4 years of seasoning from discharge or dismissal.
- Foreclosure history on a primary residence or second home splits by program. One program seasons a foreclosure at 7 years and a deed-in-lieu, pre-foreclosure, or short sale at 4. The other declines the history regardless of age. Investment files follow the 7-and-4-year path.
- Eligible properties include single-family, 2-4 units, PUDs, townhomes, and condos, including non-warrantable condos. Manufactured homes, co-ops, condotels, log homes, commercial, mixed-use, and agricultural-zoned properties are not eligible.
- A property listed for sale, or listed within the past 60 days, is ineligible in NC, PA, TN, TX, and WA.
- In Texas, a primary residence is a homestead and caps at 80% combined loan-to-value. Second homes and investment properties are non-homestead and follow their standard tables.
Which Fits Which Borrower
| Borrower | Typical fit | What to confirm |
|---|---|---|
| Owner of a paid-off primary home | Highest leverage tiers, up to $750,000 | Credit tier and state |
| Owner of a paid-off second home | Up to 90% CLTV at 720+, $500,000 max | 640 credit floor |
| Investor with a paid-off rental in own name or trust | 70% CLTV ceiling, $500,000 max | 700 credit floor |
| Investor with a paid-off rental in an LLC | Usually not eligible as held | Vesting change or DSCR cash-out |
Notice the pattern. An investor-owned line has the lowest ceiling and the highest credit floor of the three occupancy types. That is a feature of these programs, not a quirk of one lender.
HELOC or DSCR Cash-Out on a Paid-Off Rental?
This is the decision most investors actually face. The two products judge you differently.
A HELOC is judged on your credit and DTI. A DSCR cash-out refinance qualifies 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.
Here are the practical differences:
- Leverage. An investment HELOC tops out at 70% CLTV. A DSCR cash-out refinance tops out around 75% LTV across most of the network, with about 6 months of seasoning as the common expectation.
- Structure. A HELOC is revolving and floats. A DSCR cash-out is a closed-end new loan, and the spine of the product is a 30-year fixed.
- Entity. A DSCR loan can close in an LLC, subject to lender program eligibility. A HELOC cannot.
- Binding constraint. If your personal DTI is thin, a HELOC may stall. If the rent does not cover the payment, a DSCR loan may stall. Clearing 1.00 coverage is not the same as positive cash flow, since repairs, vacancy, and management sit outside the calculation. Every figure here varies by lender and program — guidelines, property type, leverage, and credit profile all apply.
Lendmire’s complete DSCR loans guide walks through how that coverage test works.
How to Evaluate Any Provider
A broker can shop several lenders for you. Whoever you talk to, ask these questions:
1. Will you write this line in first position on this occupancy type?
2. What is the maximum CLTV for my credit tier and occupancy?
3. Can my trust hold title, and does an LLC disqualify the file?
4. Is valuation automated or a full appraisal?
5. Which draw and repayment structure applies, and does the price float?
6. What fees are due at application and at closing?
7. What happens to my line if I refinance later?
Walk away from any provider that cannot answer in writing. And be cautious of any page that ranks lenders without asking about your occupancy or credit.
The Risk Side
The line turns a debt-free asset into collateral. The CFPB warns that if you cannot repay the line, you could lose your home. At least 75% of the line is drawn at closing, so you start with a real balance. Interest-only draw payments feel light, then the repayment period steps them up. Plan for that step.
Frequently Asked Questions
Can I get a HELOC on a house with no mortgage?
Yes, subject to lender guidelines. With no mortgage, the line records in first position. Approval turns on your credit, DTI, occupancy, how title is held, and the line size you request.
How much can I borrow on a free-and-clear investment property?
Investment lines top out at 70% CLTV and $500,000 in the programs Lendmire places with, and they require at least a 700 credit profile. Because the property carries no other debt, CLTV equals the line itself.
Can an LLC own the property?
No. The programs require title in your name or in a revocable living trust. An LLC, corporation, partnership, or irrevocable, blind, or land trust cannot hold title. A property already in an LLC needs a vesting change or a DSCR cash-out.
Is the payment fixed?
No. Pricing floats through both the draw and repayment periods and never converts to fixed. The payment changes with your balance, which is also how the CFPB describes HELOCs generally.
Does first position mean I get paid before everyone?
Not always. Tax liens, mechanic’s liens, and HOA super liens can outrank earlier claims under state law, which is why the title search matters.
Next Step
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 is a mortgage broker arranging financing through select lenders in its wholesale network. Every figure here is subject to lender guidelines and full file review, and nothing here is a commitment to lend.
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.
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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. Nolo – Lien Priority in Real Estate
4. Nolo – Homeowners Association Super Liens
This article is part of Lendmire’s HELOC & home equity loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Top DSCR HELOC Providers for First-Time Investors · Top Investment Property HELOC Providers for a Mortgaged Rental With a Fixed First · Top DSCR HELOC Providers With No Reserves and No Cash to Close
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
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- 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.