HELOC on Rental Property

[Michael J salemy]

I have two rental properties and a primary residence. My two rental properties my wife and I have on 15 year fixed mortgages and are about two years into it. They are in the Tampa market. They have a significant amount of equity in them.

My primary I moved into at the end of February of 2021.

Does anyone have any experience with getting a HELOC on their rental property?

I am looking for input and the good, bad and ugly. 

Thanks,

Justin
 

[Jody Sperling]

I have a first lien HELOC that covers two of my rentals. Working with a local bank in my city, I was able to get 75% LTV, and the appraisals are VERY conservative, but for me, it's well worth it because that line of credit is my savings account, my checking account, my home for all money storage.

The line fluctuates vastly, sometimes with as little as $15,000 in reserves, sometimes as much as $175,000 in reserve. I attribute my growth from a net worth of $85,000 to a net worth of $560,000 in 18 months to the HELOC. It allowed me to be aggressive and conservative at the same time so I could pursue more real estate deals.

You may have to work hard to find a product that works for you like mine works for me, but if you find it, it will change your life. I don't say that hyperbolically. It will change your life. Best of luck!

[Alecia Prigmore]

@Jody Sperling I just purchased my first investment property, a $189k duplex I am house hacking. I was interested in a HELOC for the down payment on investment number 2 in about 9 months. I only have about $26k equity in this house now though. Would I be able to get a HELOC or anything else you think I could use as leverage for a down payment for another investment?

[Jody Sperling]

@Alecia Prigmore, with 9 months of runway, you should be in a great spot depending on your saving habits. The only issue I foresee is finding a lender to refi into a HELOC before you've owned for at least 6 months.

Perhaps look into business credit, unsecured lines?

[Everett J.]

As a mortgage loan officer, who does NOT do HELOC's, I will give you my opinion. The only concern that I am seeing recently is that many banks are ending them. If that happens and you have a balance, they can call the loan.

I have personally been considering a HELOC vs a traditional mortgage on a free and clear property. At this point I am leaning more toward a fixed loan for about 8-10 years.

Good luck on your decision and your rental property journey.

[Jim Bob]

Quote from @Michael J salemy:

They are in the Tampa market. They have a significant amount of equity in them.

I'm in a similar boat, looking for a revolving line of credit to renovate and repair, for a first position. What have you found?

[Eliott Elias]

You can only take out a HELOC on a primary residence

[Paul Defngin]

Quote from @Eliott Elias:

You can only take out a HELOC on a primary residence

This is actually not necessarily true.  There are lenders that can do HELOC on investment properties.  That said, I know that you guys in TX have some pretty strict guidelines for second liens, cash-out, etc. and I am definitely not an expert there. So it may be true in some States but some should be no issue. 

I don't do HELOC's but I do know of some Credit Unions that extend HELOC on investment property.  Due to the nature of the collateral being investment properties, you can expect that things will be pretty vanilla for these type of products. Most will not allow anyone that had any adverse history of Foreclosure, Bankruptcy, Deed-In-Lieu, Short-Sale, and Pre-Foreclosure.  Some will allow property held in LLC if the LLC has 2 years of entity tax returns.And if anyone is looking for HELOC on investment, Federal Credit Unions are who I would recommend that they look into.

Service may not be as expeditious and great but if it solves the solution, why not :-)? 

They are out there.

Enjoy the rest of your Sunday. 

[Jacob Lopez]

Quote from @Eliott Elias:

You can only take out a HELOC on a primary residence

[Jacob Lopez]

Quote from @Eliott Elias:

You can only take out a HELOC on a primary residence

 Not true at all

[Jacob Lopez]

You are correct sir. 

[Ryan H.]

Quote from @Eliott Elias:

You can only take out a HELOC on a primary residence

 @Eliott Elias - I've been making many calls this past month have come across plenty of credit unions that provide lines of credit on non-owner occupied properties.

[Eliott Elias]

Sounds like it differs state to state. Can't speak for your state

[Dan H.]

This list was initially compiled by another BP user.  I would give him credit if I remembered who it was. It is quite a few months old so it should be considered as potentially a little out of date. 

Try local community bank or credit union for investment properties. TD Bank and US Bank are my best recommendations….PenFed FCU was tops, until recently.

Ridge Lending All in One, first positionHELOC

AFCU does 80%LTVonNOO. Utah

Americafirst80%LTVon noo 65% LTV Utah

Arvest Bank AR, OK, AL, MO

Bancorp South, TX Lines of Credit on free and clear houses

Bank of Southern California, CA

Bank of West (BNP Paribas) 60%LTVCA, AZ, OR

BB&T will loan on a rental portfolio

BBVA, now PNC

BECU for OR

Bellwether Community Credit Union, NH and MA 85% to 100%, draw 10 yrs

BMO Harris, 3 HELOCs to 70%LTV

Boeing Employee Credit Union

Cal Coast Credit Union, CA

Change Wholesale

Chelsea Groton Bank, CT

Citizens Bank -MiN, only in-state. Kyle Potswald

Citizens, first positionHELOC

CMG Financial 70%LTVCMG Financial in Idaho will do 100% on owner occupied.

Coastal Federal Bank of NC

Consolidated CCU, highLTVNOOLOC, OR, WA

East West Bank, up to 60%LTVwith "no docs" San Fran CA area

Eastern CT Savings Bank, CT

Figure 80% on a rental, not inLLC

Finance of America, 95% CLTV, second home only, 680 FICO, not TX

FirstBank CO and AZ 75% LTV

First Florida Credit UnionFL

First Commonwealth

First Midwest, IL up to 90% Chicago area

First Tech Federal. OR and other Western states. Up to 80% if FICO is over 780, no appraisal under $250k value.

First Republic - CA

Fremont Bank- CA

Frost Bank - TX

Fulton Bank, PA, NJ

GFA Federal Credit Union 10 yr draw, 10 yr repay, MA, NH

Granite State CU, NH 90-100%

Great Lakes Credit Union, Chicago area IL

GTE Financial, Tampa, Sarasota area FL w 2 yrs tax history on property

Hanscom FCU

HSBC 70%, for premier clients only. FL, NY, MD, CA,VA, NJ,

Horizon Bank, Kalamazoo MI

Huntington MI 75%LTV5 yr IO product available. Someone reported 80%…need confirmation

Hurst Lending and Insurance Investment propertyHELOCin Texas. No seasoning. Bridge, portfolio, foreign national and other specialty loan products.

KeyBank, flexible lender, HELOCs on second

homes and rental properties. 90%LTVon primary. BLOC FL, CO, OH, UT, ID

Lafayette Ambassador Bank

Merchants Bank MN See Pavel Ushakov

Mid-Hudson Valley FCU

Mountain America CU Utah, ID, MT, NV, AZ, NM. 85%LTV, promo rate of 1.99%. Can refi an existing mortgage to a shorter term "Mini Mortgage."

Navy Federal 80%LTV

Norway Savings Bank, Maine

Omaha Mortgage

Oregonians CU - OR

PenFed - max 3 other properties, including primary. 80%LTV, prime + 1%, <4 properties. Pulls Equifax.

Peoples Bank of NC

PSECU up to 80%

Quorum Federal Credit Union 80%LTV, owned byLLCis OK. Very flexible lender. NY. 5 year draw, IO for 5 yrs and PI for 10 year repayment period. FICO at least 680. Not in Texas.

Quontic

Red Canoe Credit Union, WA OR

Regions

River Bank & Trust, AL

Rivermark Credit Union, OR 90%LTV

SCCU Florida 80%LTV, 2.75% first year promo, notLLC

SECU NC 65%LTVrate 2.75% Oct 2021

Signature Federal Credit Union 75%LTV(100% on primary residence),VA

Silvergate Bank, CA

Sound CU "non-owner occupiedHELOC, capped at $150K and interest rates are prime + 2%, 3% or 4%, based on credit, not to exceed 70% ltv." CT

SouthEast Bank TN

Symmetry

S&T Bank, PA

TCF Bank, FL, GA

TD Bank 75% line with FICO about 740. Up to 4 properties.

Torrey Pines Bank, see also Western Alliance Bank Corp. Commercial real estate solutions for developers, home builders.

Troy Bank & Trust, AL

Trustco Bank, FL, NY, NJ, MA, VT

Trustmark Bank, Texas. Call it aLOCrather than aHELOC

Union Bank, specializes in nooHELOC. KCMO, NE., MUFG.

Upstate Bank in Rochester NY,LOCup to 80%

US Bank 80%. “Business equity line of credit: Use Real Estate as Equity” up to $500k, interest only. gather your business and personal tax returns, financial statements, articles of incorporation and other legal documents.”

Vectra Bank - Colo

Veritex, TexasHELOC

Webster Bank, CT

WAFD Bank. Origination fee 1% or $700. Can be in anLLC, max 75%LTV. WA, OR, UT, NV, ID, NM, AZ, TX. All-in-One construction loan, too.

WellsFargo 60%LTVUp to 5 properties.

Workers Credit Union, MA 80-100%

WSFS...up to 70% on rental

Zions Bank, Utah

NO: Truist

TEXAShttps://www.cutx.org/home-equity-loans/helocsWAFD, Frost, Trustmark

High primary, not investment,HELOC:

Spring EQ 97.5% and fast, at 11 days

Foreign national: Civic 80%LTVfor cash out. 5/1, 7/1 and 10/1 interest only ARMS. 1 to 2 year bridge loan. Fund in 5. To 10 business days; can finance the rehab.

SMALL BALANCEHELOCON PRIMARY

US Bank 15k to $750k 10 year draw. Requires high FICO 730 andLTV70% or less

PenFed Best Credit Union $25 to $500k 10 yr draw. Up to 90%LTV.

Bank of America, low fee. $25k to $1 million, 10 year draw. HUGE line

PNC Bank best for small home improvements $10k up. 7 to 10 yr draw.

TD Bank from $8 k up. Can go from $25 to $500k…large line.

Frost Bank, in Texas only.

CALIFORNIA: Bank of Southern California, Bank of West (BNP Paribas), Cal Coast Credit Union, East West Bank, up to 60%LTVwith "no docs" San Fran, First Republic, Fremont Bank, HSBC, Quorum FCU, Silvergate Bank,

UTAH

Mountain American Credit Union and America First have great rates for HELOCs

America First will do aHELOCon an investment property in Utah.

[Cody Harmon]

Quote from @Dan H.:

This list was initially compiled by another BP user.  I would give him credit if I remembered who it was. It is quite a few months old so it should be considered as potentially a little out of date. 

Try local community bank or credit union for investment properties. TD Bank and US Bank are my best recommendations….PenFed FCU was tops, until recently.

Ridge Lending All in One, first positionHELOC

AFCU does 80%LTVonNOO. Utah

Americafirst80%LTVon noo 65% LTV Utah

Arvest Bank AR, OK, AL, MO

Bancorp South, TX Lines of Credit on free and clear houses

Bank of Southern California, CA

Bank of West (BNP Paribas) 60%LTVCA, AZ, OR

BB&T will loan on a rental portfolio

BBVA, now PNC

BECU for OR

Bellwether Community Credit Union, NH and MA 85% to 100%, draw 10 yrs

BMO Harris, 3 HELOCs to 70%LTV

Boeing Employee Credit Union

Cal Coast Credit Union, CA

Change Wholesale

Chelsea Groton Bank, CT

Citizens Bank -MiN, only in-state. Kyle Potswald

Citizens, first positionHELOC

CMG Financial 70%LTVCMG Financial in Idaho will do 100% on owner occupied.

Coastal Federal Bank of NC

Consolidated CCU, highLTVNOOLOC, OR, WA

East West Bank, up to 60%LTVwith "no docs" San Fran CA area

Eastern CT Savings Bank, CT

Figure 80% on a rental, not inLLC

Finance of America, 95% CLTV, second home only, 680 FICO, not TX

FirstBank CO and AZ 75% LTV

First Florida Credit UnionFL

First Commonwealth

First Midwest, IL up to 90% Chicago area

First Tech Federal. OR and other Western states. Up to 80% if FICO is over 780, no appraisal under $250k value.

First Republic - CA

Fremont Bank- CA

Frost Bank - TX

Fulton Bank, PA, NJ

GFA Federal Credit Union 10 yr draw, 10 yr repay, MA, NH

Granite State CU, NH 90-100%

Great Lakes Credit Union, Chicago area IL

GTE Financial, Tampa, Sarasota area FL w 2 yrs tax history on property

Hanscom FCU

HSBC 70%, for premier clients only. FL, NY, MD, CA,VA, NJ,

Horizon Bank, Kalamazoo MI

Huntington MI 75%LTV5 yr IO product available. Someone reported 80%…need confirmation

Hurst Lending and Insurance Investment propertyHELOCin Texas. No seasoning. Bridge, portfolio, foreign national and other specialty loan products.

KeyBank, flexible lender, HELOCs on second

homes and rental properties. 90%LTVon primary. BLOC FL, CO, OH, UT, ID

Lafayette Ambassador Bank

Merchants Bank MN See Pavel Ushakov

Mid-Hudson Valley FCU

Mountain America CU Utah, ID, MT, NV, AZ, NM. 85%LTV, promo rate of 1.99%. Can refi an existing mortgage to a shorter term "Mini Mortgage."

Navy Federal 80%LTV

Norway Savings Bank, Maine

Omaha Mortgage

Oregonians CU - OR

PenFed - max 3 other properties, including primary. 80%LTV, prime + 1%, <4 properties. Pulls Equifax.

Peoples Bank of NC

PSECU up to 80%

Quorum Federal Credit Union 80%LTV, owned byLLCis OK. Very flexible lender. NY. 5 year draw, IO for 5 yrs and PI for 10 year repayment period. FICO at least 680. Not in Texas.

Quontic

Red Canoe Credit Union, WA OR

Regions

River Bank & Trust, AL

Rivermark Credit Union, OR 90%LTV

SCCU Florida 80%LTV, 2.75% first year promo, notLLC

SECU NC 65%LTVrate 2.75% Oct 2021

Signature Federal Credit Union 75%LTV(100% on primary residence),VA

Silvergate Bank, CA

Sound CU "non-owner occupiedHELOC, capped at $150K and interest rates are prime + 2%, 3% or 4%, based on credit, not to exceed 70% ltv." CT

SouthEast Bank TN

Symmetry

S&T Bank, PA

TCF Bank, FL, GA

TD Bank 75% line with FICO about 740. Up to 4 properties.

Torrey Pines Bank, see also Western Alliance Bank Corp. Commercial real estate solutions for developers, home builders.

Troy Bank & Trust, AL

Trustco Bank, FL, NY, NJ, MA, VT

Trustmark Bank, Texas. Call it aLOCrather than aHELOC

Union Bank, specializes in nooHELOC. KCMO, NE., MUFG.

Upstate Bank in Rochester NY,LOCup to 80%

US Bank 80%. “Business equity line of credit: Use Real Estate as Equity” up to $500k, interest only. gather your business and personal tax returns, financial statements, articles of incorporation and other legal documents.”

Vectra Bank - Colo

Veritex, TexasHELOC

Webster Bank, CT

WAFD Bank. Origination fee 1% or $700. Can be in anLLC, max 75%LTV. WA, OR, UT, NV, ID, NM, AZ, TX. All-in-One construction loan, too.

WellsFargo 60%LTVUp to 5 properties.

Workers Credit Union, MA 80-100%

WSFS...up to 70% on rental

Zions Bank, Utah

NO: Truist

TEXAShttps://www.cutx.org/home-equity-loans/helocsWAFD, Frost, Trustmark

High primary, not investment,HELOC:

Spring EQ 97.5% and fast, at 11 days

Foreign national: Civic 80%LTVfor cash out. 5/1, 7/1 and 10/1 interest only ARMS. 1 to 2 year bridge loan. Fund in 5. To 10 business days; can finance the rehab.

SMALL BALANCEHELOCON PRIMARY

US Bank 15k to $750k 10 year draw. Requires high FICO 730 andLTV70% or less

PenFed Best Credit Union $25 to $500k 10 yr draw. Up to 90%LTV.

Bank of America, low fee. $25k to $1 million, 10 year draw. HUGE line

PNC Bank best for small home improvements $10k up. 7 to 10 yr draw.

TD Bank from $8 k up. Can go from $25 to $500k…large line.

Frost Bank, in Texas only.

CALIFORNIA: Bank of Southern California, Bank of West (BNP Paribas), Cal Coast Credit Union, East West Bank, up to 60%LTVwith "no docs" San Fran, First Republic, Fremont Bank, HSBC, Quorum FCU, Silvergate Bank,

UTAH

Mountain American Credit Union and America First have great rates for HELOCs

America First will do aHELOCon an investment property in Utah.

Thanks for the list I saw this a while back in another post and lost it. I called Pen Fed from the list a few weeks ago and they are no longer doing HELOCs on investment properties. After that I called FirstBank in Colorado and I am well into the process of getting a Heloc on an investment property, but it is now 70% LTV not 75% like the list shows.

[Jacob Lopez]

LoanDepot is going to be rolling out the best heloc on the market within the next month or so. This going to be one of the most popular helocs on the market. This isn’t a common product for big lenders to carry but they can lend more money than most local banks or credit unions so I imagine it will give you access to more ltv than the typical heloc. 

[Lien Vuong]

Thanks for this!!