HELOC for investment property

[Jason Capalad]

Hello BP, i am looking for a HELOC to upgrade another one of my homes, when I applied, i was told helocs aren't allowed for investment properties and that i would have to do a full cash out refi. I was also told 35k is too low for a HELOC. Is this accurate? I don't want to do a full cash out refi because my locked rate is 3%.

[Aaron Byrne]

While a HELOC may be permitted on investment properties in general, lenders vary on their willingness to make those loans. As a HELOC is typically in addition to an exiting first lien, the combined LTV on the home may be greater than what a lender might be comfortable with. Plus, since you do not live in the property, that creates more risk to the lender and their requirements may be stricter or the cause them to simply not make HELOC loans on investment properties at all. Also, same with minimum loan amounts, there is no set minimum for a HELOC. It more has to do with your willingness to do what it takes to meet the lender's requirements and the lender's willingness to make the loan based on their internal guidelines.