Can I get a HELOC on a rental property?

Many banks only offer HELOCs on the home you live in. Lenders see rental properties as riskier, so the ones that do lend on them set tighter rules: a higher credit score, often 700 or better; cash reserves; and less borrowing against the property's value.

The key number is the combined loan-to-value, or CLTV: your first mortgage plus the new line, divided by the property's value. On rentals, most lenders cap it at about 70–75%. For example, on a rental worth $500,000 with $300,000 owed, a 75% limit allows $375,000 in total debt, so the line could be up to $75,000. Rates are also typically higher than on a primary-home HELOC.

There are other ways to reach the same equity. A fixed-rate second mortgage on the rental gives you a lump sum and keeps your first loan in place. A DSCR cash-out refinance qualifies on the property's rent instead of your personal income, and can close in an LLC, but it replaces your current first mortgage. And if you have a lot of equity in the home you live in, a HELOC on your primary residence usually has better terms than one on the rental.

Investment property loans are available nationwide, so your rental does not need to be in Florida, Texas or California.

You can check whether you qualify with a soft credit pull, which does not affect your credit score. A full credit check only happens later, if you decide to move forward.