Obtaining a HELOC for an investment Property?

[Brandon Terrazas]

Hello Everyone,

I am trying to see if it is possible to get a HELOC for an investment property. So far, all the lenders that I have talked to have told me that they don't offer that service. Is anyone aware of a lender that does offer HELOCs for investment properties. If so, would you pass that information on to me?

Thank you all for your time.

Sincerely,

Brandon Terrazas

[Jody Sperling]

I have a HELOC on one of my investment properties. It's through Dundee Bank, but they only lend locally to Omaha. There are several other local banks here in town that will supply HELOCs on investment properties, and I think the key is to talk to your local credit unions and local banks in your city.

If you've already exhausted your local banks, circle back and see if you can talk with the commercial lending side of the bank. The first time I asked Dundee if it would consider a HELOC on my rental, they said they didn't have that kind of product available, but I later learned that the mortgage broker side of lending was unaware of what the commercial side did.

I think it's fairly common for banks to be siloed, and I think they do it intentionally as a form of risk mitigation. So asking the right people the right questions becomes really important. Best of luck!

[Marc Rice]

@Brandon Terrazas great advice shared above by @Jody Sperling. I haven’t found any local banks here that will do HELOCs on investment property.

[Marty Johnston]

@Brandon Terrazas Most commonly, HELOCs are a O/O related loan product. My ears perked up to see @Jody Sperlings post here that there are in fact some banks / CUs who offer this. I've never seen a HELOC available for an Investment property so I'd follow her lead here and reach out to all the local banks and CU's in your area like she said.

Good luck!

[Kimberly Abeln]

I'm running into the same problem in AZ. Some bank websites say that they offer them, but then when I call they say it's for OO properties only (maybe their policy changed when rates dropped so low or bc of Covid??) Please keep me posted on what you find and I'll do the same.

[Zack Karp]

There are a few banks that were doing them (First Midwest @Michael Barbari is here on BP), then Covid hit and many of them suspended doing them. I think some have returned? Usually though, helocs on investment properties need to be in 1st lien position, and I suspect at a max LTV of around 75%. This is not the same thing as getting a heloc as a 2nd lien behind a primary mortgage at a high LTV like on a primary residence.

Best of luck!

[Marty Johnston]

@Zack Karp aahhh, this makes much more sense. Thank youf or this! 

"Usually though, helocs on investment properties need to be in 1st lien position, and I suspect at a max LTV of around 75%."

[Michael Barbari]

@Zack Karp Just started investment helocs again. 60% LTV. First lien only.

[Zack Karp]

^^^ Bingo :)

[Ryan Williamson]

@Brandon Terrazas

I just closed on a HELOC last month with suntrust! Call them… I am using the funds for a down payment on my first rental propert and any rehab that needs to be done

[Justin Phillips]

@Brandon Terrazas @Kimberly Abeln They're definitely still out there! Just a little more specialized these days. I have one on my rental, and what a great tool. Especially with these inflated values, it's a great time to get one set before a potential shift. 
Probably with the tightening in availability, I've been getting a ton of investor heloc inquires lately. 

[Kimberly Abeln]

It didn't matter to any of the banks/CU's I called that the investment property we own is free and clear. It wasn't a first-position issue, but a non-OO property issue. I called and was turned down by: US Bank, PenFed, BofA, PNC, SunTrust, Flagstar, Citi, OneAZ CU, TD Bank, Union Bank, Pyramid CU, TOPCU (I did talk to Ken Krapf in their business department and they will do a Business line of credit for 1-2 years, renewable, for like 4-5%, with an investment property as collateral at 75% LTV), finally I was able to get Jeff at Vantage West CU who will do a HELOC on investment property at 70% LTV around 6.5-7.25%. I hope this saves you a few hours of calling :)

[Kevin Noell]

Hi @Brandon Terrazas, I was able to close on a HELOC with Pentagon Federal Credit Union, which I learned about on this site. We closed about a month ago. This is a property we used to live in and still has the homestead exemption on it; the homestead exemption was required by them on the collateral property.

The property is a duplex, and I was surprised this wasn't an issue for them. I'm pretty sure it was 75% max LTV. Variable interest rate was 4.75% at the time but not sure about now. The process took about 5 MONTHS!!

[Thomas Skuba]

I just closed on two investment property HELOCs last week with a local credit union. Prime + 1%, 75% LTV in second lien position. 10 year draw period. It's called Greenwood Credit Union but pretty sure they only lend in RI and MA. Best bet would be to find the local bank or credit union (the kind that has only one or two branches) and see if they offer it.

[Kimberly Carver]

@Brandon Terrazas

Hi! We have a home equity loan on investment property (not HELOC) from TD bank. They were able to do HELOC on the property as well but straight home equity loan worked better for our needs.

[Kimberly Carver]

@Kimberly Carver

For us it is a second position loan

[Brandon Terrazas]

Thank you everyone for the great information. 

[Rossana Ludena]

Any one from Canada trying to do HELOC or Home Equity Loan on an investing property?

[Neil P.]

@Brandon Terrazas where you from I needed the same thing found a lender in nj

[Jonny Van Dyck]

I am also looking for one in Canada on a mortgage free rental property that I own.  So far I've asked Tangerine - they said no. I'm waiting to hear back from my mortgage broker who usually works with Scotiabank - sounds like it's a maybe from them at Prime +0.5.  Going to talk to my local credit union soon.  I also plan to ask a contact from Canada Life if they will do it.

[Brandon Terrazas]

@Neil P. I live in Arizona.

[Neil P.]

@Brandon Terrazas

@Rob Glasser has found a few banks that do it

[Eric Skinner]

@Brandon Terrazas I closed on an investment property HELOC with Penfed a couple weeks ago. They offer 80% LTV w/ a 2nd lien position at a rate of 1.5% above prime. They require that you have no more than 4 mortgages when you request your HELOC.

The whole process took 2 months and they covered all closing costs.

I hope this helps.

[Thomas J Mele]

@Brandon Terrazas

I literally just created the same post! Help us😂

[Neil P.]

@Eric Skinner where do they do New Jersey ?

[Eric Skinner]

Originally posted by @Neil P.:

@Eric Skinner where do they do New Jersey ?

I’m not sure about NJ, but they definitely lend in multiple states. My property is in CA and they would also have done it to my property in TX. I’d give them a call to find out. Good Luck!