Investment property HELOC: DSCR HELOC and second mortgage on a rental

A DSCR HELOC is a line of credit against the equity in a rental property, qualified on the property's rent instead of your personal income. You draw against it as needed, similar to a traditional HELOC, but the approval logic is different. Since approval comes down to whether the rent covers the payments, you can run the property through my DSCR calculator before we talk.

A DSCR second mortgage is one lump sum, secured by the rental behind your first mortgage. Same rent based qualification, different structure than a line of credit.

Both options sit behind your existing first mortgage, so you keep whatever you already have on that loan and add a second lien for the funds you need.

If you'd rather have one loan than two, or your first mortgage doesn't need to stay as is, a DSCR cash out refinance replaces the first mortgage and pulls equity out at the same time. Ask me which structure fits your numbers.

Investors who want to pull equity out of a rental to buy another property, fund renovations or cover reserves, without disturbing a first mortgage they want to keep.

• The property address and current mortgage balance
• Documented rent, a lease or the appraiser's market rent
• Entity documents if closing in an LLC
• Credit and reserve information

Portland multi units and seasonal rentals both come up often. I review the rent roll on a multi unit and the seasonality on a seasonal property the same way I would for a purchase.

Insurance quotes and condo rules still matter on a DSCR HELOC or second mortgage the same as on a purchase. Get a current insurance quote and check the association's rules before you count on the numbers.

I do investment property HELOCs and DSCR second mortgages on investment and rental properties in these states: Alabama, Alaska, Arkansas, Colorado, Connecticut, Delaware, District of Columbia, Florida, Georgia, Hawaii (not Hawai'i Island), Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Maryland (not Baltimore City), Michigan, Mississippi, Missouri, Montana (LLC only), Nebraska, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Pennsylvania, South Carolina, Texas, Vermont, Virginia (LLC only), Washington, Wisconsin, Wyoming. California is not available for originations. Primary and second homes are available in Maine and Florida only. I do not solicit primary-residence HELOCs in New Hampshire. See my Licensing page for company and LO licensing detail.