Getting a HELOC on a Second Home or Investment Property

The "Non-Owner Occupied" Challenge

Banks love "Owner-Occupied" loans because people will fight tooth and nail to keep the roof over their heads. Second homes (vacation properties) and Investment Properties (rentals) are riskier. If money gets tight, borrowers let these properties go into foreclosure first.

Stricter Rules for Second Homes

• Lower LTV: While you can get 90% LTV on your primary home, second homes are usually capped at 70% to 80% LTV.
• Higher Rates: Expect to pay 0.50% to 1.00% higher interest rates than on a primary residence HELOC.
• Higher Credit Score: Minimum FICO might be 720 or 740 instead of 680.
• Reserves: Banks may require you to show 6 months of mortgage payments in cash reserves.

Investment Property HELOCs

These are even harder to find. Most big banks (Chase, Wells Fargo) simply do not offer them. You will need to look for:

• Local Credit Unions: They often have "Portfolio Loans" and are more flexible.
• Specialized Lenders: Companies like PenFed or Figure sometimes have investment property products.

Strategy: If you have a rental property with tons of equity, a "Cash-Out Refinance" (DSCR Loan) is often easier to qualify for than a HELOC, although you lose your low rate.