HELOC on an investment or rental property: 70% CLTV caps, higher rates and an $80,000 example

8 min read · LenderMatch Learn

Yes, you can get a HELOC on an investment property, but fewer lenders offer one, and the ones that do lend less and charge more than on the home you live in. One California credit union, for example, caps a non-owner-occupied line at 70% of the property’s value (counting your mortgage) instead of 80%, and its published rental HELOC rates start at 9.75% APR. Expect a higher credit score requirement and cash reserves too.

Below are the typical requirements, how lenders count rent, an $80,000 example on a $400,000 rental, and the other route some owners take: a HELOC on their own home. LenderMatch lets you describe the property once, rental or primary, and compare the offers lenders make.

Can you get a HELOC on an investment property?

A HELOC (home equity line of credit) is a revolving line secured by a property. You draw what you need during a draw period, often 10 years, and pay interest on what you have drawn. On a rental, the line is secured by the rental, so the property you don’t live in carries the risk. See how a HELOC works for the basics.

Experian puts it plainly: “Not all lenders offer HELOCs on investment properties,” and requirements “tend to be stricter than those for primary residences.” It adds that “not as many lenders offer HELOCs on rentals and investment properties, but plenty still do.” Lenders that do may also limit the property type. The credit union above, for instance, lends on one- to four-unit properties in its home state and excludes manufactured and mobile homes.

HELOC on investment property vs primary residence

The same lender often prices and sizes the two very differently. Here is one credit union’s published schedule, side by side:

The owner-occupied HELOC figure is a 6-month introductory rate that then turns variable. Rates and terms change; this is one lender’s schedule, not a market average.

The fixed-rate home equity loans show the gap most cleanly: the rental range starts two percentage points higher at both ends. The credit union’s HELOC margin is set by your creditworthiness on top of the Wall Street Journal prime rate, which was 7.00% (unchanged since September 17, 2026). Track it on our prime rate page.

HELOC on investment property requirements

Every lender sets its own list, but these are the items to expect:

• Equity. A combined loan-to-value (CLTV) cap of roughly 70% to 80%. Experian says lenders typically cap it at 80%; the credit union above uses 70% and may go lower based on credit.
• Credit score. Experian says you will typically need at least 720, though some lenders accept lower scores.
• Debt-to-income ratio. Usually below 40% to 50%, depending on the lender, per Experian.
• Cash reserves. Experian says most lenders want savings that cover at least six months of mortgage payments.
• Rent documentation. Leases, tax returns with Schedule E, or an appraiser’s rent estimate.
• Insurance. Property insurance on the rental, and flood insurance where it applies.

For the full checklist on primary homes, compare HELOC requirements.

How rental income counts toward your DTI

HELOC lenders write their own income rules. Fannie Mae’s rules for mortgages are a useful reference: its Selling Guide (B3-3.8-02, September 2, 2026) gives two ways to count rent on a property you own:

• Schedule E. If the property is on your tax return, the lender starts with the net amount on Schedule E and adds back depreciation, interest, HOA dues, taxes and insurance.
• Lease or rent schedule. If it is not on your return yet, the lender takes 75% of the lease amount (the other 25% covers vacancy and upkeep) and subtracts the full monthly payment: principal, interest, taxes, insurance and dues.

A positive result can add to your income if you have at least 12 months of experience managing rentals. A negative result is added to your monthly debts. A new HELOC payment on the rental goes into that subtraction.

Worked example: an $80,000 line on a $400,000 rental

Say your single-family rental is worth $400,000, you owe $200,000 on it, the lease is $2,400 a month, and the mortgage payment with taxes and insurance is $1,750.

At 70%, $400,000 × 70% = $280,000, minus the $200,000 you owe, leaves an $80,000 line. That is $40,000 less than the same equity would support on a home you live in.

The payment. Drawn in full at 9.75%, the $80,000 line costs about $650 a month interest-only during the draw period. If the repayment period is 15 years, the payment at the same rate rises to about $847.

The rent math. Using the 75% lease method: $2,400 × 75% = $1,800. Before the HELOC, $1,800 minus the $1,750 payment leaves $50 a month. With the HELOC’s $650 added, the property shows a $600 monthly loss, and that $600 counts as a debt when the lender figures your DTI. In repayment, the loss would grow to about $797.

Calculated by LenderMatch. The 9.75% rate is one credit union’s published starting APR (effective October 22, 2026); variable rates change. The property figures are assumptions for illustration.

Run your own numbers in the home equity calculator and the HELOC payment calculator.

Using a HELOC on your primary home to buy a rental instead

Because lenders allow more borrowing on the home you live in, some owners tap their primary home to buy or improve a rental instead. Fannie Mae’s Selling Guide (B3-4.3-15) accepts borrowed funds secured by real estate as a source for a down payment, closing costs and reserves. The lender must count the payment on that loan as a debt, or calculate an equivalent if no payment is due yet.

For scale: Freddie Mac allows up to 85% loan-to-value on a one-unit investment purchase (15% down) and 75% on two to four units (25% down). On a $300,000 single-family rental, that is a $45,000 down payment. Drawing $55,000 to cover it plus closing costs at an assumed 8.00% (the 7.00% prime rate plus a 1.00% margin, for illustration) adds about $367 a month interest-only to your debts.

HELOC on investment property in Texas

Texas home equity rules in Article XVI, Section 50 of the state constitution, including the 80% combined cap, protect your homestead, the home you live in. A rental that is not your homestead is outside them, so a line on it follows the lender’s own guidelines. A HELOC on your Texas homestead to fund a rental still follows every Section 50 rule. See Texas cash-out refinance rules and the Texas HELOC guide.

Is a HELOC on a rental property tax deductible?

IRS Publication 527 (2025) says you can deduct mortgage interest you pay on your rental property. It also says that when a refinance is larger than the old balance, the interest on the part “not related to rental use generally can’t be deducted.” In other words, how you use the money matters. Going the other way, Publication 936 says HELOC interest on your main home is not deductible as home mortgage interest unless the money buys, builds or substantially improves that home, and it points borrowers who used the money for business, investment or other deductible activities to separate rules. Details are in is HELOC interest tax deductible, and a tax professional can confirm your case.

Other ways to tap rental equity

• A home equity loan on the rental. A fixed lump sum instead of a line. Compare the two in HELOC vs home equity loan.
• A cash-out refinance on the rental. Fannie Mae and Freddie Mac allow up to 75% loan-to-value on a one-unit rental and 70% on two to four units. It replaces the existing mortgage, so it makes most sense when that mortgage’s rate isn’t far below today’s. See cash-out refinance on an investment property.

Frequently asked questions

Can you get a HELOC on a rental property?

Yes, but fewer lenders offer one than offer a HELOC on the home you live in, and the terms are tighter. Expect a lower borrowing limit (often 70% to 80% of the property’s value, counting your mortgage), a higher rate, a higher credit score and cash reserves.

What is the maximum CLTV for a HELOC on an investment property?

It depends on the lender. One California credit union caps non-owner-occupied lines at 70% combined loan-to-value, against 80% on owner-occupied homes. Experian says lenders typically cap investment property HELOCs at 80%. Your credit score can push the cap lower.

Are HELOC rates higher on an investment property?

Usually. The same credit union’s published rates (effective October 22, 2026) start at 9.75% APR on a non-owner-occupied HELOC, and its home equity loans start at 8.99% on rentals versus 6.99% on owner-occupied homes. Most HELOCs are variable and move with the prime rate.

Does rental income count when you apply for a HELOC on a rental?

Often, but each lender sets its rules. For mortgages, Fannie Mae counts 75% of the rent from a lease or appraisal rent schedule, or uses the cash flow on your Schedule E, then subtracts the property’s full payment. A loss is added to your monthly debts.

Is a HELOC on a rental property tax deductible?

It can be. IRS Publication 527 says you can deduct mortgage interest you pay on your rental property, but what you spend the money on matters. Interest on money used for personal purposes generally is not a rental expense. Ask a tax professional about your situation.

Does LenderMatch check my credit?

No. LenderMatch never pulls your credit. A lender you choose may check it, with your permission, when you apply.

Compare HELOC offers from lenders in your state →