Eligibility basics
| Requirement | Investment property |
|---|---|
| Minimum FICO | 680 |
| Initial credit check | Soft-pull Experian FICO 9 |
| Maximum line | Up to $750,000, subject to CLTV |
| Full appraisal | Generally not required for lines of $400,000 or less |
CLTV limits for investment properties are typically lower than for a primary residence, so plan on keeping more equity in the property. Rental income and your overall debt-to-income ratio are also considered.
How investors use a HELOC
- Down payment on the next property. Use equity from one rental to help buy another.
- Value-add renovations. Update units to raise rents or resale value.
- Capital reserves. Cover vacancies, turnovers, or major repairs without draining cash.
- Short-term bridge funding. Move quickly on a deal, then refinance or sell to repay.
Using a HELOC in a buy-renovate-rent strategy
Some investors draw from a HELOC to buy or renovate a property, rent it out, then refinance the improved property and use the proceeds to pay the HELOC back down — restoring the line for the next project. It can work well, but it depends on accurate renovation budgets and realistic after-repair values.
Leverage magnifies both gains and losses. Stress-test your plan for higher rates, longer vacancies, and renovation overruns before you draw.
Taxes
Interest on money borrowed for a rental business may be treated differently from interest on a personal residence. Talk with a tax professional about how to track and report HELOC interest on investment properties.