If you're a real estate investor — or want to become one — you've probably asked one of two questions:
- "Can I get a HELOC on an investment property I already own?"
- "Can I use a HELOC on my primary home to buy an investment property?"
The answer to both is yes — but the rules, rates, and lender eligibility are very different from a standard HELOC on a primary residence. This guide covers both angles: getting a HELOC on a rental you already own, and using your primary home's equity to acquire a new rental. If you're new to HELOCs entirely, start with our complete HELOC guide first.
Part 1: Can You Get a HELOC on an Investment Property?
Yes. But the terms are significantly stricter than a primary residence HELOC.
Eligibility Requirements
RequirementPrimary Residence HELOCInvestment Property HELOCMinimum FICO600–660 (varies by lender)680+ (most lenders)Maximum CLTV85–90%70–80% (varies by lender and FICO)Interest rates7–9%8–11% (1–2% premium)Lender availabilityMost HELOC lendersFewer lenders — not all serve investmentAppraisalAVM or full (varies)More likely to require full appraisalIncome documentationAutomated or traditionalMore likely traditional (full docs)
The lower CLTV cap is the biggest constraint. On a $300,000 rental with a $200,000 mortgage, a 70% CLTV cap gives you only $10,000 in borrowable equity ($300K × 70% = $210K − $200K). At 80%, you'd get $55,000. The difference is dramatic — and it's entirely lender-dependent.
CLTV by Credit Score for Investment Properties
FICOMax CLTVMax Loan Amount (1st Lien)Max Loan Amount (2nd Lien)760+80%$400K$350K720–75980%$400K$275K680–71970%$400K$200KBelow 680Not eligible——
Higher credit scores unlock higher loan amounts on second liens — the tier system rewards strong credit with more flexibility. Figure, Altgage's primary HELOC partner, maintains a 680 FICO minimum and provides tiered access based on your profile. Even with a high score, some products cap investment CLTV at 70%. This is why shopping through a broker matters — the difference between 70% and 80% from different lenders is enormous.
Why Home Equity Loans Often Don't Work for Investment Property
This is a critical point many borrowers miss. Some major home equity loan lenders — including well-known national brands — restrict their product to primary residences and second homes only. Investment properties are not eligible for a home equity loan from these lenders.
If you need a second-lien product to tap equity on a rental property, a HELOC is typically your only option. This is one of the strongest reasons to work with a broker who knows which lenders serve which property types.
Read our HELOC vs. home equity loan comparison for more on this distinction and try out our calculator
Property Type Eligibility
Figure's HELOC is available for:
- Non-owner occupied single-family and condos (up to $400K, 80% CLTV, 680+ FICO)
- Non-owner occupied multi-family (up to $400K, 80% CLTV, 680+)
- LLC borrowers (investment and second home properties only)
Important restrictions:
- Properties purchased in the last 90 days are ineligible
- No co-borrowers allowed
- Third liens are not available for non-owner occupied properties
- Variable rate is not available for first liens and is excluded in many states
Texas Homestead Rules for Investment Property HELOCs
Texas adds a layer of complexity for investors. Here's what you need to know:
You can get a HELOC on an investment property in Texas — but you must already own a primary homestead in the state. If your primary residence is in another state and you own a rental in Texas, you may not be eligible for a Texas investment property HELOC. Check with your lender or broker.
The Texas constitutional rules are homestead-only. The 80% CLTV cap, the 12-day pre-closing waiting period, the 3-day post-closing rescission, and the one-loan-at-a-time restriction apply only to your Texas homestead (primary residence). They do not apply to investment properties in Texas. Investment properties follow the lender's standard investment CLTV guidelines — 70–80% for most lenders.
What this means in practice: A Texas homeowner can potentially have a HELOC on their primary residence (at 80% CLTV with the waiting and rescission periods) AND a separate HELOC on a Texas investment property (at 70–80% CLTV without those delays) — but the homestead must be established first.
Texas minimum initial draw and rate adjustment. Figure's Texas investment property HELOC has a minimum initial draw of $35,000 and includes a +0.300% rate adjustment. The minimum applies to the full line, not just the initial draw — 100% of the approved amount must be drawn at closing. Note that maximum CLTV on Texas investment properties is 80% (following lender guidelines, not the constitutional restriction).
For more on Texas-specific HELOC rules, read our HELOC rates in Texas guide.
Figure's Non-Owner Occupied Terms Summary
Figure offers competitive fixed rates on investment property HELOCs with these key features:
Draw Terms:
- 10-year draw → 3-year repayment
- 15-year draw → 4-year repayment
- 20-year draw → 4-year repayment
- 30-year draw → 5-year repayment
Additional Draws: Minimum $4,000 per draw, unlimited draws within the draw period.
Occupancy Adjustment: Non-owner occupied properties carry a rate bump of +0.350% (first lien) or +0.750% (second/third lien) on top of the base rate.
Origination Fees: 0%, 0.99%, 1.99%, or 2.99%. Lower fees come with higher rates; standard options are 1.99% and 2.99%.
Underwriting: Automated process using 9 data points, soft credit pull, AVM valuation, automated income verification, and 5-day funding.
Recasting: Automatic recast at 9.999% with no fee.
Credit Model: FICO 9.
Part 2: Using Your Primary Home's HELOC to Buy an Investment Property
This is the more common strategy — and it's how most investors fund their first few rental acquisitions.
How the Strategy Works
You open a HELOC on your primary residence and use the funds as a down payment on a rental property. The rental gets its own purchase mortgage (conventional, DSCR, or non-QM), and the HELOC sits as a second lien on your primary home.
You now have three obligations: your primary mortgage (unchanged), the HELOC, and the rental's mortgage. The rental's cash flow should cover its own mortgage AND contribute toward paying down the HELOC.
The Math: A Worked Example
ItemAmountYour primary home value$400,000Your mortgage balance$250,000Available HELOC (80% CLTV, owner-occupied)$70,000Rental property purchase price$240,000Down payment (25%, from HELOC)$60,000DSCR loan on rental ($180K at 7.5%)~$1,580/monthHELOC payment ($60K at 8.5%, 30-yr amortizing)~$480/monthTotal monthly cost~$2,060/monthMonthly rental income$2,200/monthNet monthly cash flow+$140/month
The rental cash-flows positive by $140/month even after covering both its own mortgage and the HELOC payment. Modest margin, but you're building equity in a second property using equity from your first — without putting up cash savings.
The DSCR metric: Monthly rent ÷ the rental's housing payment = $2,200 ÷ $1,580 = 1.39 DSCR — comfortably above the 1.0 minimum. The HELOC payment isn't part of the DSCR calculation — DSCR lenders evaluate the property, not your full personal debt load.
When This Strategy Makes Sense
You have significant equity in your primary home. The strategy works best when you can draw $50,000–$100,000+ without stretching to maximum CLTV. In Texas, the 80% cap means you need substantial equity to make this work.
The rental cash-flows at or above breakeven. If rent covers the rental's own mortgage (DSCR ≥ 1.0), the HELOC payment becomes manageable — ideally covered by the property's surplus.
You want to move quickly on deals. Having a HELOC already in place means you can make offers with proof of funds immediately, rather than waiting to save up. Speed wins deals in competitive markets.
You plan to pay down the HELOC aggressively. Treat the HELOC as temporary bridge financing. Use rental cash flow and other income to pay it down, restoring borrowing capacity for the next deal.
The Repeat Strategy
This is how investors scale:
- Open a HELOC on your primary home (Figure's owner-occupied product)
- Use it as a down payment on Rental #1
- Pay down the HELOC with rental cash flow + personal income
- Once the HELOC is sufficiently reduced, draw again for Rental #2
- Repeat
Each cycle builds your portfolio using the same HELOC. The key constraint is repayment speed — the faster you pay down between acquisitions, the sooner you can go again.
Step-by-Step Setup
1. Determine your available equity. Use the HELOC calculator to estimate your maximum line. Remember: 80% CLTV in Texas and most states for owner-occupied primary homes.
2. Apply for the HELOC before you find a deal. Don't wait. Having the HELOC approved and in place means you can move fast when the right property appears.
3. Get prequalified for the rental's financing. Whether DSCR, conventional investor, or non-QM, know your terms before making offers. As a broker, Altgage can source both the HELOC and the rental mortgage.
4. Run the numbers on every deal. Include the HELOC payment in your total cost analysis, not just the rental's mortgage. The deal needs to cash-flow after both obligations.
5. Pay down the HELOC with rental cash flow. Treat it as a temporary tool. As you pay it down, you restore borrowing capacity for the next deal.
The Risks (And How to Manage Them)
Vacancy risk. If the rental sits empty for two months, you're covering the DSCR loan payment AND the HELOC payment from personal funds. Mitigation: Maintain 6+ months of reserves for both obligations before using this strategy.
Rate risk. If your HELOC has a variable rate and the prime rate rises, your cost of carry increases. Mitigation: Choose a fixed-rate HELOC (Figure's standard), or model the deal assuming rates 2% higher than current.
Home value decline. If your primary home's value drops, the HELOC lender could freeze your credit line. Already-drawn funds aren't affected, but you can't draw more. Mitigation: Don't max out your HELOC. Keep a buffer.
Over-leveraging. Each rental funded by a HELOC adds debt to your primary home. Mitigation: Limit draws to amounts you could service for 12+ months with zero rental income.
Tax complexity. HELOC interest used for investment property purposes is not deductible as home mortgage interest (since you're not improving the home securing the HELOC). However, it may be deductible as an investment expense on Schedule E. Consult a tax professional.
HELOC vs. Other Investment Property Funding Options
MethodSpeedCostBest ForHELOC on primary home (Figure)5–30 daysCompetitive fixed ratesDown payments, small rehabsHELOC on existing rental (Figure NOO)2–4 weeks8–11% on drawTapping rental equity for next acquisitionHome equity loan3–6 weeks7–9% fixedNot eligible for investment with many lendersCash-out refi30–45 days6.5–7.5% on full balanceLarge amounts, rate improvementSavings/cashImmediateOpportunity cost onlyAny scenario (if available)Hard money3–7 days10–14% + pointsFix-and-flip, auction purchases
The HELOC sits in a sweet spot: faster and cheaper than most alternatives, with the flexibility to draw only what you need. For investors building a portfolio one or two properties at a time, it's the most capital-efficient path — and often the only second-lien option available for investment properties.
Frequently Asked Questions
Can you get a HELOC on an investment property?
Yes, though terms are stricter than a primary residence. Expect a 680+ FICO minimum, 70–80% max CLTV (vs. 85–90% for primary), and rates 1–2% higher. Fewer lenders offer investment property HELOCs, so shopping through a broker helps. Figure, Altgage's primary HELOC partner, offers non-owner occupied HELOCs up to $400K with transparent terms.
Can you use a HELOC to buy an investment property?
Yes. You can open a HELOC on your primary home and use the funds as a down payment on a rental. The HELOC stays secured by your primary home; the rental gets its own mortgage (typically a DSCR loan).
Can I get a HELOC on an investment property in Texas?
Yes, but you must already own a primary homestead in Texas. The Texas constitutional restrictions (80% CLTV, 12-day pre-closing waiting period, 3-day post-closing rescission, one-loan-at-a-time) apply only to your homestead, not investment properties. Investment property HELOCs in Texas follow lender guidelines at 70–80% CLTV. Figure's Texas product includes a minimum $35,000 initial draw and a +0.300% rate adjustment.
What about a home equity loan for investment property?
Some major home equity loan lenders restrict the product to primary residences and second homes — investment properties are not eligible. If you need a second-lien product for a rental, a HELOC is typically your only option.
Is HELOC interest deductible on a rental property?
If you use HELOC funds to purchase or improve an investment property, the interest may be deductible as an investment expense on Schedule E — not as home mortgage interest on Schedule A. Consult a CPA.
How much HELOC do I need for an investment property down payment?
Investment property down payments are typically 20–25% of the purchase price. For a $250,000 rental, that's $50,000–$62,500. Add reserves for closing costs, initial repairs, and a vacancy buffer — plan for 30–35% of the property's value in total capital needed.
What's the CLTV limit for an investment property HELOC?
Typically 70–80% depending on the lender and your credit score. This is lower than the 85–90% available for primary residences. Figure's non-owner occupied product maxes at 80% CLTV for borrowers with 760+ FICO, stepping down to 70% for 680–719 FICO. In Texas, the 80% constitutional cap applies only to your homestead — investment properties follow lender guidelines.
Can I use a HELOC as proof of funds?
Most sellers and their agents accept a HELOC approval letter or account statement as proof of funds. Confirm with the listing agent before submitting an offer.
Are there restrictions on recent property purchases?
Yes. Figure's HELOC is not available for properties purchased in the last 90 days. This rule applies to both owner-occupied and non-owner occupied properties.
What are the draw period terms?
Figure offers fixed-rate HELOCs with draw periods of 10, 15, 20, or 30 years, followed by repayment periods of 3–5 years (depending on draw length). You can make additional draws (minimum $4,000) at any time during the draw period.
The Bottom Line
A HELOC is one of the most efficient tools for scaling a real estate portfolio. Whether you're tapping equity from a rental you already own or using your primary home's equity to fund a new acquisition, a HELOC gives you speed, flexibility, and access that other second-lien products can't match — especially for investment properties, where home equity loans from many lenders aren't even an option.
The key is running conservative numbers: make sure the rental cash-flows after both mortgages, maintain healthy reserves, and treat the HELOC as bridge financing you'll pay down. In Texas, plan around the homestead requirements and Figure's $35,000 minimum draw and rate adjustment for investment properties.
Figure, Altgage's primary HELOC partner, offers:
- Competitive fixed rates — see rates at rates.altgage.com
- Transparent terms — 0%, 0.99%, 1.99%, or 2.99% origination fees with clear rate-fee tradeoffs
- Fast closing — 5-day funding via automated underwriting
- Flexible draws — draw what you need, when you need it (minimum $4K per draw)
- Both sides of the strategy — owner-occupied HELOCs for primary homes AND non-owner occupied HELOCs for investment properties
Altgage can structure both the HELOC on your primary home and the DSCR loan on the rental from multiple lenders, matching each product to the right lender for your credit profile, property type, and state.
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