Pay off HEL before converting to rental

[Christian Allen]

I'm currently house hacking with plans to house hack again in the future but want to leverage the equity I currently have. If I take out a Home Equity Loan against my current primary to buy another investment property, do I have to pay off the balance before turning my current primary into a rental? Do they typically work like an FHA loan where there is a minimum 1 year occupancy requirement?

I plan on living in my current property for at least another year but don't want to be stuck if in the future I do decide to house hack again.  

[Kevin Lefeuvre]

I don't think any bank is sitting there checking if you go home every night to that address. Lol. These issues only appear when you don't pay your monthly due.

[Andrew Postell]

@Christian Allen there is no issue with you receiving a HELOC and then moving out. Just get the HELOC before you move. It's really difficult if you do it afterward. There is usually not a 1 year occupancy requirement with HELOCs but you could get the HELOC now and not use it until next year if you were really concerned about it. You can have a $0 balance until you use it if you wanted.

[Louise A.]

@Christian Allen

Definitely no requirement to pay off the HELOC after you move out of your current primary. I put HELOCs on everything I live in because the LTV is so high. I then use the HELOC as I choose after I move out. PM me if you have more specific questions.