A Home Equity Loan (HELOAN) is a fixed-rate second mortgage that enables you to borrow against the equity you’ve built in your home. Equity is calculated by subtracting the remaining mortgage balance from the home’s current appraised value. This allows homeowners to unlock the value of their property while continuing to maintain their primary mortgage.
With a fixed interest rate, a HELOAN offers predictable monthly payments that simplify long-term financial planning. This stability makes it easier to budget and avoid surprises from fluctuating interest rates. Whether you’re looking to renovate your home, consolidate debt, or cover major expenses, the loan provides a reliable solution.
What is the difference between HELOC and HELOAN?
A Home Equity Loan (HELOAN) and a Home Equity Line of Credit (HELOC) are both ways to borrow against the equity in your home, but they function quite differently.
A Home Equity Loan (HELOAN) provides homeowners with a lump sum of money that is repaid through fixed monthly payments over a set term, offering stability and predictability with its fixed interest rate.
This makes it particularly suitable for borrowers who have a specific, well-defined financial need, such as funding major home renovations, consolidating higher-interest debt into a single payment, or covering significant one-time expenses where a clear budget and repayment plan can be established in advance.
A Home Equity Line of Credit (HELOC) functions as a flexible, revolving credit line that allows homeowners to borrow funds as needed, rather than receiving a single lump sum, and it often begins with interest-only payments that help manage initial cash flow.
Since the interest rate is typically variable, monthly payments can fluctuate over time, making it more suitable for borrowers who anticipate ongoing, recurring, or uncertain expenses, such as covering the costs of education, financing a series of home improvement projects, or addressing unexpected financial needs that arise gradually rather than all at once.
| Feature | HELOAN | HELOC |
|---|---|---|
| Structure | Provides a lump sum upfront—paid over a fixed term with fixed interest rates. | Functions like a revolving credit line, similar to a credit card. |
| Repayment | Fixed monthly payments, including both principal and interest. | Typically interest-only payments during the draw period, followed by full monthly payments with principal and interest. |
| Interest Rate | Fixed | Generally variable |
| Best For | One-time expenses where the exact amount needed is known, such as home renovations or debt consolidation. | Ongoing expenses or projects where the total cost is uncertain, such as funding education or managing multiple home improvement projects. |
HELOAN Program Highlights
- Loan amounts available up to $600,000
- No Private Mortgage Insurance (PMI) required
- No asset or reserve requirements
- Fixed interest rates for predictable monthly payments
- Eligible property types: single-family homes, 2–4 unit properties, condominiums, PUDs, and rural properties
- Available for primary residences, second homes, and investment properties
- Flexible repayment terms up to 30 years
HELOC Program Features
- Applicable to Primary Residences, Second Homes, and Investment Properties
- Loan amounts available up to $500,000
- Interest-only payment option available
- For investment properties, qualification can be based on Debt Service Coverage Ratio (DSCR), no income documentation required
- Short-term rental income is allowed
- Borrow any amount up to your credit limit
- Draw limit depends on the borrower’s home equity as determined by the appraised value
- Borrow up to 90% of your home’s appraised value, subject to lender approval
Commercial Loans - DSCR JUMBO 