A Home Equity Line of Credit (HELOC) is a flexible type of loan that allows homeowners to borrow against the equity they have built up in their property, using that equity as collateral to secure the credit line.
Unlike a standard loan that provides a fixed amount upfront, a HELOC functions more like a revolving credit account, giving borrowers the ability to access funds as needed within an approved limit..
Benefits of HELOC program
- Access cash when you need it
- Lower interest rates than credit cards or personal loans
- Only pay interest on what you use
- Potential to increase your home’s value with smart improvements
- Flexible repayment options for your lifestyle
DSCR HELOC
A Debt Service Coverage Ratio (DSCR) Home Equity Line of Credit (HELOC) is a financial product tailored specifically for property investors – seasoned and first-time investors eligible. DSCR HELOC allows investors to leverage their rental income to secure a revolving line of credit.
DSCR HELOC program details:
- Maximum loan amount: $3 million
- Qualifying income is the subject property’s DSCR*
- Minimum FICO: 700
- 30-year variable term with 3-year draw period
- No minimum DSCR
- Maximum Loan-to-Value (LTV): 75%
- First-time investors allowed
- Eligible properties: 1-4 unit properties, Planned Unit Developments (PUDs), warrantable condominiums
- Vesting in the name of Limited Liability Company (LLC), partnership, and corporations allowed
- The maximum number of borrowers allowed per loan is four (4)
HELOC Program benefits:
- Borrow against your investment property’s equity with ease.
- Qualify based on property income, not personal income.
- Flexible revolving line of credit.
- Competitive variable interest rates with interest-only payment options.
- Supports short-term rental and other income-generating properties.
- Access funds for renovations, new investments, or other business opportunities.
- Simple approval process designed for real estate investors.
Eligibility for 1st Lien HELOC:
- Minimum DSCR ≥ 0.75
- Loan Amount: $2,000,001 – $3,000,000
- FICO: 760
- LTV/CLTV: 75%
- Reserve Requirement: 6 months
- Loan Amount: $750,001 – $2,000,000
- FICO: 720
- LTV/CLTV: 75%
- Reserve Requirement: 6 months
- Loan Amount: $50,000 – $750,000
- FICO: 720
- LTV/CLTV: 75%
- Reserve Requirement: 6 months
- Loan Amount: $50,000 – $750,000
- FICO: 700
- LTV/CLTV: 70%
- Reserve Requirement: 6 months
- Loan Amount: $2,000,001 – $3,000,000
- No Minimum DSCR
- Loan Amount: $2,000,001 – $3,000,000
- FICO: 760
- LTV/CLTV: 75%
- Reserve Requirement: 12 months
- Loan Amount: $50,000 – $2,000,000
- FICO: 720
- LTV/CLTV: 75%
- Reserve Requirement: 12 months
- Loan Amount: $50,000 – $750,000
- FICO: 700
- LTV/CLTV: 70%
- Reserve Requirement: 9 months
- Loan Amount: $2,000,001 – $3,000,000
Note: Cash out proceeds can’t be used for reserve requirements.
DSCR documentation:
- Long Term rental documentation:
- FNMA Form 1007 or 1025 reflects long-term market rents.
- Executed Lease agreement.
- Short-term rental (e.g., Airbnb, VRBO, Flip Key) documentation:
- A 5% LTV reduction applies to all transactions using short-term rental income.
- FNMA Form 1007 or 1025 reflecting short-term market rents.
- The most recent 24-month bank statements from the borrower evidence short-term rental deposits. The borrower must provide rental records for the subject property to support monthly deposits.
- Gross rents must be reduced by 20% to reflect extraordinary costs (i.e., advertising, furnishings, cleaning) associated with operating short-term rental property.
Commercial Loans - DSCR JUMBO 