HELOC Minimums for LTV and Do the Minimums Change If Primary or Rental Property

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HELOC Minimums for LTV and Do the Minimums Change If Primary or Rental Property

Matt Greenfield
Member since 2018 · 8 posts · 4 votes

Hello!

I am thinking about using a HELOC on my rental property and the company I spoke to said that the minimum LTV they would lend on a HELOC is 80%. Perhaps I am misremembering, but I believe I heard a friend say that you can use HELOC in some cases to access funds up to 95% LTV. I know the typical LTV amount for term loans is 80%, but can you access further equity using a HELOC that is more than 80% LTV? Does this LTV limit change if it is a HELOC on your primary residence or rental property? Does the minimum LTVs change based on the intention for those funds?

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  • Denis PonderPro Member
    New to Real Estate · Yuma, AZ · Member since 2023 · 280 posts · 246 votes
    3y

    I'm not a lender, so more qualified people will respond.  However, here is what I have learned from my own inquiry.

    Most likely, they were saying, or meant to say, the maximum they will lend on a HELOC is 80%, not minimum.

    Secondly, finding a HELOC on an investment property is going to be a challenge.

    Third, getting north of 75%/80% LTV on an investment property generally comes with a significant cost in terms of interest rates/points.

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  • Brittany MinocchiBusiness Member
    Lender · Massillon, OH · Member since 2022 · 1k+ posts · 486 votes
    3y

    Hey Matt - 

    It was likely the max LTV, not minimum LTV of 80%. The amount of equity you have access to is usually higher on a primary than on an investment property. Different lenders will have different LTVs, but on an investment, you probably won't find anything higher than 80-85%. I'm including HELOANs/seconds in these figures, as HELOCs on investments are harder to come by and will be a lower LTV. I only know of two of them for investments, and max LTVs are 65-70%. Only single family properties that are not in an LLC are eligible. LTV will be based on occupancy type, property type, FICO...a few different things.

    [email protected]330-354-6590
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  • Brayden Hrycko
    Lender · Allentown, PA · Member since 2023 · 207 posts · 38 votes
    3y

    Hey @Matt Greenfield,

    As stated, the max for investment helocs will get you around 85% LTV. You can get 95-100% on a primary depending on the lender. The minimums aren't 80%, that would have been that lenders cap.

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  • Dennis Muno
    Lender · Denton, TX · Member since 2023 · 349 posts · 80 votes
    3y
    Quote from @Matt Greenfield:

    Hello!

    I am thinking about using a HELOC on my rental property and the company I spoke to said that the minimum LTV they would lend on a HELOC is 80%. Perhaps I am misremembering, but I believe I heard a friend say that you can use HELOC in some cases to access funds up to 95% LTV. I know the typical LTV amount for term loans is 80%, but can you access further equity using a HELOC that is more than 80% LTV? Does this LTV limit change if it is a HELOC on your primary residence or rental property? Does the minimum LTVs change based on the intention for those funds?


    So usually for HELOCs, the max combined loan to value(Mortgage+HELOC) allowed is 85%. HELOCs on rental properties 2 units or more are not the most common for lenders as many balk at HELOCs for multifamily rentals

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