Lending question for a rental property

[Melissa Griffin]

I am not sure if this is the right place to post but hopefully someone can offer insight.   My mother-in-law recently signed over her home to my husband.  There is no mortgage on the property however there was a tax lien on it which we paid off before transferring title.  She remains in the home; we have a signed lease and she has been paying us rent.   Since there is no mortgage on the property, we have been attempting to apply for financing using equity from the home in order to reimburse ourselves for personal funds used to take care of the tax lien as well has have an open line of credit to use for repairs on the home should they arise.  We recently went to Wells Fargo as one of their loan officers claimed that they do such HELOCs all the time however, after handing over all of our paperwork, we are now being told that since we show no rental income from the property on our last 2 years tax returns that they can not do the loan.  

Are there any other products that we are overlooking?  Thanks in advance for any insight.