HELOC lending for rental

[Havan Surat]

Hello,

Please share any HELOC lending available for rental property in Illinois with Canadian W-2 income verification?

[Lauren Robins]

Quote from @Havan Surat:

Hello,

Please share any HELOC lending available for rental property in Illinois with Canadian W-2 income verification?

If you're a Canadian earning W-2 income and looking to get a HELOC on a rental property in Illinois, there are some viable cross-border lending options available—though they come with specific requirements.

One of the most reliable options is through BMO’s Gateway Program, which is designed specifically for Canadians investing in U.S. real estate. This program allows Canadian citizens to use their Canadian income verification (such as T4s or W-2s) to qualify for U.S.-based mortgages, including HELOCs. BMO Gateway is familiar with cross-border documentation and often does not require a U.S. credit score, making it a go-to solution for Canadians buying or refinancing U.S. properties—including investment rentals and condos. They typically require 20%–30% equity, proof of Canadian citizenship or residency status, and documentation of your assets.

In terms of traditional U.S. lenders, some institutions do offer HELOCs on rental or investment properties, although it’s less common than for primary residences. Lenders such as TD Bank, PNC, Flagstar Bank, Guaranteed Rate, and even some local Illinois credit unions may provide HELOCs, but requirements are stricter. Generally, they want to see a strong U.S. credit profile (credit score of 720 or higher), a debt-to-income ratio under 43%, and reserves covering 6 to 18 months of payments. Loan-to-value ratios are often capped at 75–80%, and most HELOCs are adjustable-rate products with a draw period followed by a repayment period.

Another path to consider is alternative lending through DSCR (Debt-Service Coverage Ratio) loans or no-doc investment property lines of credit. These products are offered by private lenders like Truss Financial and don’t rely on W-2 income or traditional documentation. Instead, they qualify you based on the rental income the property generates. If the numbers support it, this can be an excellent workaround for non-U.S. income earners who have strong cash-flowing properties.

If you're looking to pull equity but a HELOC doesn’t pan out, you might also consider a cash-out refinance using either a conventional lender or a DSCR lender. While you’d be replacing your existing mortgage, it could give you access to a lump sum to redeploy elsewhere.


Note: This information is for educational and informational purposes only and does not constitute legal, tax, financial, or investment advice. No attorney-client, fiduciary, or professional relationship is established through this communication.