Yes , homeowners are allowed to take out a home equity line of credit or HELOC on an investment property, but expect a smaller pool of lenders and tighter underwriting than on a primary residence. Most lenders that approve investment property HELOCs want a 700–740 credit score, a combined loan-to-value ratio of 70% to 75%, six to eighteen months of reserves, and a documented lease. Rates typically run 0.50% to 2.50% higher than owner-occupied pricing because non-owner-occupied collateral carries more default risk. Portfolio banks, credit unions, and non-QM lenders are far more likely to approve these lines than large retail banks.
2026 Best Lenders for Investment Property HELOCs
| # | Lender | NMLS ID | Investment property angle |
|---|---|---|---|
| 1 | Griffin Funding, Inc. | 1120111 | DSCR programs down to 0.75 ratio |
| 2 | Fifth Third Bank, N.A. | 403245 | Equity Flexline with fixed-rate lock option |
| 3 | PenFed Credit Union | 401822 | 50 states + DC; up to 3 fixed-rate advances during draw |
| 4 | Spring EQ, LLC | 1464945 | Publishes 80% max CLTV on investment properties; 640 min FICO |
| 5 | Figure Lending LLC | 1717824 | Fastest digital funding; fixed rate per draw |
| 6 | Better Mortgage Corporation | 330511 | One Day HELOC™; covers primary, second home, investment |
| 7 | Rate (Guaranteed Rate, Inc.) | 2611 | Lends on single-family rentals and investment homes |
| 8 | Truss Financial Group, LLC | 2006915 | DSCR HELOC for self-employed investors |
| 9 | TD Bank, N.A. | 399800 | National bank most often cited for non-owner-occupied HELOCs |
| 10 | Angel Oak Mortgage Solutions LLC | 1160240 | Wholesale/correspondent non-QM; DSCR second liens |
Most national banks quietly decline non-owner-occupied requests, so the shortlist of investment property HELOC lenders is short, but it exists. Griffin Funding, whose DSCR program can go as low as a 0.75 ratio, and Fifth Third Bank, N.A. are the two national banks most often named for HELOCs on rentals, with Fifth Third’s Equity Flexline offering a fixed-rate lock. PenFed Credit Union lends in all 50 states and allows up to three fixed-rate advances during the draw period. Spring EQ is a home equity specialist that publicly caps investment properties at 80% CLTV with a 640 minimum FICO, while Figure Lending and Better Mortgage deliver the fastest digital closings days, not weeks. Rate, formerly Guaranteed Rate, writes fixed-rate equity products against single-family rentals and investment homes. For self-employed landlords and portfolio investors, DSCR and non-QM specialists dominate: Truss Financial Group , TD Bank , TD Bank, N.A. and Angel Oak Mortgage Solutions a wholesale non-QM lender offering DSCR second liens through brokers. Expect 70% to 75% CLTV and pricing roughly 0.50% to 2.50% above owner-occupied lines.
There is no universal “best HELOC for investment property” the right investment property HELOC lender depends on your state, entity structure, DSCR, and closing timeline. Verify licensing at NMLS Consumer Access, then compare Loan Estimates from at least three lenders. Home Equity Mart can match you with lenders actively funding non-owner-occupied credit lines today.
People want to know if its is still possible to take out a HELOC on their investment property, or second home. The home equity line of credit has been a powerful tool for homeowners to leverage their real estate to buy an investment property, of vacation home. But it is also possible to take out a second mortgage or HELOC line on an investment property if you meet the home equity lending requirements with loan to value, credit score and debt to income ratio.
Do you want a large amount of cash for major expenses, such as property renovations or paying off debt? Real estate investors may be able to obtain a home equity line of credit or HELOC on their rental properties. Many real estate investments are spurred when a homeowner decides to borrow money with a HELOC to cover the down-payment requirement for a rental property or investment home.
A common desire is to use equity from one property fund the purchase of another. If you are interested in getting a HELOC for an investment home, or rental property below is important information to review.
How to Use a HELOC to Buy an Investment Property or 2nd Home
A home equity line of credit is a revolving credit line that uses the property as collateral.
A HELOC on one of your investment properties uses the rental property as collateral and not your personal home.
Accessing your investment home equity through a HELOC is often done with a credit card; once the credit line is set up, you just swipe the card when you want to buy something with the equity.
Home-equity credit lines usually have much lower interest rates than personal loans and credit cards, so they are a smart choice for real estate investors. Using a HELOC to buy a second home or rental property could jump-start your income if you do it the right way.
Your HELOC from an investment property will typically have a 10-year draw period when you can access the money and make interest-only payments. After the initial draw period ends, you pay interest and principle each month at a variable rate. Once the repayment period kicks in, you may want to refinance the HELOC into a fixed rate home equity loan. The Home Equity Mart can help you connect with trusted HELOC lenders that offer a wide variety of home equity financing options. Find the best HELOC lenders for investment property.
A HELOC on an investment property can be a smart decision for the investor who wants to use their equity to fund large expenses. For example, you may want to fund the rehab of a new property with equity from another property. You also can use the home equity line of credit to make a 10% or 20% down payment on a new property. Many savvy borrowers have accumulated a strong real estate portfolio that started with a HELOC.
How to Use a HELOC Line of Credit for Down Payment on Rental or Investment Property
Taking out a HELOC on an investment property can help you leverage your equity to pay for renovations, consolidate debt, or even purchase a new investment property. However, qualifying for this type of financing is challenging and can put your property at risk of foreclosure. Therefore, it’s crucial to carefully assess your finances to ensure this option makes sense for your situation.
Why HELOC Loans Are Great for an Investment Property
Getting a HELOC on a rental property is usually more difficult than with your personal residence.
The reason is that you don’t live in the property, so there is a higher chance there could be a loan default.
You may have to look more extensively to find a lender that will issue a cash out equity loan or HELOC on an investment property.
These are the typical requirements for investment property HELOCs, but understand the qualifications vary widely by lender:
• Debt-to-income ratio: Usually 43% maximum for investment properties; 43% to 50% for personal residences.
• LTV maximum: 80% for investment properties; 85% for personal residences.
• Credit score: 720 minimum for investment homes 620 minimum for personal residences. Ask about a HELOC for bad credit if you don’t meet the eligibility for a prime-rate HELOC.
• Cash reserves: Most lenders will want to see a year or 18 months of cash reserves for investment homes. Cash reserves for personal residences vary.
• Property occupancy: You need to have a renter in place with a solid rental history. For a personal residence HELOC, you should be living in the home.
How to Get an Investment Property HELOC
Like with a personal residence, you will need to shop around for the best HELOC for your investment home. You should look at lending offers from at least three lenders. Look for low rates, but also examine how long the teaser rate will last and what the fees are for getting the HELOC. You also should understand what the variable rate is based on and how high it can go. Look at HELOC closing costs, how much they are, and whether they can be wrapped into the loan or paid in cash. Our investment advisors can offer you various HELOCs on rental properties, so you can compare which meets your needs best.
How HELOC Funds Are Taxed
Federal tax law changed a few years ago the rules for tax deductibility for HELOCs. Let’s discuss the tax considerations and potential benefits when taking out a HELOCs on a investment home. The interest paid on a HELOC could be tax-deductible if the funds are utilized to “buy, build, or substantially improve” the taxpayer’s secured home, whether it’s their primary residence or an investment property. Ask you tax advisor if closing costs and lending fees are deductible as well
The bottom line is if you use the equity for home repairs or home improvement, you can usually deduce the interest for tax purposes. If the money is used for purposes other than home repairs and improvements, it property is not tax deductible.
FAQs for HELOCs on Investment Properties
How do investment property HELOC lenders qualify rental income?
Two approaches dominate. Traditional lenders use full documentation and typically count only 75% of gross rent to offset the property’s payment, then measure your total debt-to-income ratio — usually capped near 43%. Non-QM and DSCR lenders skip tax returns entirely and divide gross monthly rent by the property’s principal, interest, taxes, insurance, and HOA payment; ratios of 1.0 or higher are standard, with some programs going as low as 0.75. Short-term rentals are generally underwritten on market rent or projected annual income divided by twelve rather than nightly averages.
Are HELOC rates on investment properties higher than on a primary home?
Yes. Investment property HELOC rates typically price 0.50% to 2.50% above owner-occupied lines, and DSCR or non-QM programs often land in the 8% to 10% APR range for well-qualified borrowers. Lenders charge the premium because you don’t live in the collateral, and non-owner-occupied loans historically default at higher rates. You can narrow the gap with a 740-plus credit score, a CLTV at or below 70%, a seasoned lease, and strong reserves. Comparing Loan Estimates from at least three investment property HELOC lenders is the single most effective way to lower your cost.
Can you get a HELOC on a rental property held in an LLC?
Sometimes, but it narrows your options. Many consumer HELOC programs require title to be held in a personal name, so investors are asked to deed the property out of the LLC or to sign a personal guarantee. Business-purpose and DSCR lenders are generally more flexible and will lend directly to an LLC, though closing costs and rates run higher. Moving title can trigger a due-on-sale clause on your existing mortgage and may affect liability protection, so speak with your attorney and CPA before restructuring ownership to obtain a line.
Do banks and lenders offer HELOCs on investment properties?
The vast majority of HELOCs are taken out against primary residences, as lenders feel more secure with a loan on the home you live in, knowing you’ll prioritize repaying it. However, some lenders do offer investment property HELOCs HELOCs.
How can you pull equity out of rental property?
Lenders often require more than 25% equity in rental properties to pull cash out, as they typically allow a maximum loan-to-value (LTV) ratio of 75%. Additionally, lenders may impose a waiting period of six months from the time of purchase before an investor can refinance a rental property.
How much equity can you take out of an investment property?
With a home equity loan, you may be able to borrow up to 80% (or even 100%) of your home’s value, minus any existing mortgage balance. However, if you’re seeking a home equity loan on an investment property, you may only be able to borrow up to 60% to 75% of the property’s value. That means you 25% to 40% equity in your home to take out a HELOC on an investment home or rental property.
What is a first lien HELOC on an investment property?
A first lien HELOC on an investment property replaces your existing mortgage rather than sitting behind it, making the line of credit the primary lien on the rental. Because the lender holds first position, pricing is often better than a second-lien equity line, and every rent deposit can be swept against the balance to reduce daily interest. The trade-off is that you give up your current fixed mortgage rate, so a first lien HELOC usually makes sense only when your existing rate is at or above market pricing.
What banks offer HELOCs on investment properties?
Few of the largest retail banks advertise them, but some do lend on non-owner-occupied homes. TD Bank and Fifth Third Bank are the national banks most often named for investment property HELOCs, while credit unions such as PenFed and Quorum, regional portfolio banks, and non-QM lenders like Truss Financial Group, Griffin Funding, and Angel Oak actively write them. Availability varies by state, property type, and whether title is held personally or in an LLC. Because programs change frequently, ask each lender directly whether they currently fund non-owner-occupied credit lines before applying.
What Are the Alternative Loans to Finance Real Estate Investments and Rental Properties?
Cash Out Refinance – For many decades, borrowers have been pulling money out of their primary residence and second homes with a cash out refinance loan. When the interest rates are trending upward it becomes risky as borrowers would rather not refinance out of their low rate mortgage into a higher interest rate.
Private Money Lending – Many real estate investors would rather not document their income, so private money mortgages offer new opportunities that are considered unconventional by most banks and lenders.
Should You Use A HELOC On an Investment Property?
Is getting a HELOC on an investment property right for you? First, you need to check with several lenders to learn if you can get approved for the loan. If you have a good credit score and your DTI and LTV are in line with the requirements, you probably can get approved.
One of the benefits of a HELOC is you don’t pay interest on the money unless you access the credit line. So, HELOC funds can be a good emergency fund for an investor who wants to have money available if a rehab costs more than they expected. HELOCs usually last for up to 10 years, so you may have the funds available for some time without using them.
A HELOC in 2024 and beyond may have a higher rate than a few years ago, especially on an rental property. But the rate will probably be lower than personal loans and credit cards.
Plus, if rates decline this year and next year as many believe, the variable rate on the HELOC may decline. If you are concerned about your rate varying, it may be better to consider a fixed-rate home equity loan on your investment property.
Obtaining a HELOC on an investment property can be a good move for the investor who wants to fund major expenses, such as buying a new property or doing renovations.
Getting qualified for a HELOC on your investment property may be more challenging because you don’t live there. It may be necessary to shop among several lenders to find one that will loan on your investment property. You can always check with our lending advisors to see if we can get you approved for an equity loan or HELOC you need.
If you find getting approved for a HELOC on an investment property too difficult, another option is to get a HELOC on your personal residence. You also could consider a cash-out refinance on your personal residence, if your current rate is above market rates. One of our loan professionals can review your financial situation and inform you about your best HELOC and other options with your investment property.
Home Equity Mart simplifies the process for homeowners to tap their home equity. Take advantage of the lenders offering a wide range of home equity products includes fixed home equity loans and flexible home equity lines of credit for buying investment properties, second homes and business start-up capital. Let HEM connect you with competitive lenders who can meet your financing needs.
Updated : HEM Editorial Team | July 2026 | Fact-Checked ✓