Dayton, OH · Member since 2014 · 18 posts · 23 votes
Hi, I have an investment property with about 50% equity in it. I am interested in leveraging the equity to do some more real estate investing. I have approached a few banks (including the current mortgage holder) and a few credit unions about obtaining a HELOC on this property. I have been repeatedly told things like: 1) we don't do HELOCs if we are in second lien position behind the primary mortgage holder 2) we only do HOLs, 3) Etc. I have checked with the primary mortgage holder and they do not offer HELOCs.
Does anyone know of any lenders that will do a HELOC in this situation?
Or does anyone have any other ideas on how to leverage this equity?
Note: I'm not much interested in the home equity loan type of offer as I'm not sure when I would pull the trigger on a another real estate transaction (real estate is the side job).
FYI, I contacted all of the companies in the posts above asking if they have a HELOC product offering for single home investment property in Ohio when they are not the first mortgage holder.
Navy Federal Credit Union has a product.
Pentagon Federal Credit Union (PefFed) has a product.
Thanks for the help!
I for one appreciate when people get back on here and update us on their results.... thanks Mike! I was curious about the same product
Flipper/Rehabber · Birmingham, AL · Member since 2017 · 2 posts · 0 votes
8y
Has anyone found an institution that offers HELOC's on investments props in Indiana? I'm looking to do something similar on 3 fully paid properties I have there.
Dayton, OH · Member since 2014 · 18 posts · 23 votes
8y
FYI, I was able to get a HELOC on an investment property in OHIO at about a 9% rate. Note: they do have offers to lock in at a lower rate. Jonathan you asked about Indiana though - pretty sure somewhere in this thread someone mentions that the Huntington Bank footprint extends into Indiana. Hope that helps!
Investor · Suwanee, GA · Member since 2010 · 104 posts · 22 votes
7y
*BUMP*
We have a few long term buy and holds with very good underlying financing that could use capital improvements/deferred maintenance. A HELOC might be the perfect tool.
Checked with NavyFed and PenFed. If I remember correctly in order for them to consider giving us a 2nd position HELOC on investment property (no matter CLTV) we had to have occupied the investment at some point in the past. Non-starter. Got busy with other stuff and stopped looking. Did anyone have any luck?
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
7y
I keep adding banks, as people post that they've gotten one locked-and-loaded. Here is my current list of lenders that will do a HELOC on an investment property:
Trustco US Bank TD Bank PenFed Union Bank, specializes in noo HELOC Arvest Bank Union Bank, Washington StateEast West Bank offers HELOC on non-owner occupied investment properties up to 60% LTV with "no docs".Utah: Americafirst 80% LTV on noo 65% LTV 15 year 5.74% First Florida Credit Union (Jacksonville area) 1.99% for 12 months, 5.25% variable 80% CLTV 20 yr w 10 yr draw Hurst Lending and Insurance Investment property HELOC in Texas Tower FCU, all states except TX, max 45 DTI, green card ok. Max of three rental properties.
Rental Property Investor · Boynton Beach, FL · Member since 2014 · 273 posts · 197 votes
7y
Wow, looking back at this thread cannot believe it was 4 years ago. So much has changed there are so many lending options now compared to then. This isn't even an issue anymore with all the private lenders that are decent rates now.
North of Houston · Member since 2018 · 349 posts · 181 votes
7y
If it’s on your homestead? Many many local banks will use the tax value and a cheap title commitment and they use the Wall Street rate
If you want to keep your interest payments tax deductible , be very careful that you only use the funds for the heloc on business ventures stuff like that consult with your CPA make sure your CPA is on board ,
Rental Property Investor · Troy · Member since 2017 · 175 posts · 271 votes
7y
Question. I know that penfed will give heloc on investment properties if you have 4 or less. Is it 4 or less properties or is it 4 or less mortgages? We own 8 outright. No loan on them at all.
Mortgage Broker · Dallas, TX · Member since 2017 · 657 posts · 275 votes
7y
@Lam N. That would be a faster question to call and asked them. Normally the rules are based on finances properties so I would be led to believe if yours are free and clear then there should be no issue. But like they say “trust but verify.”
Rental Property Investor · USA · Member since 2017 · 46 posts · 29 votes
6y
Just to update anyone who may be looking for info on the subject, I've called around to a number of banks and lenders and this is what my list looks like:
Ridge Lending Group-YES. Max 70% LTV, minimum initial draw of $75k, but they have no rule saying you can't pay it back immediately and then just keep the line open. You do pay 2.5 points on that 75k though, so its about $1850 in initial costs. Rate as of 24Feb was 5.5%, the lowest I found.
NavyFed-YES (for members). 70% LTV and requires 6-month seasoning (to use an 80% value of your home) or 12-months (to use 100% of the appraised value).
Wells Fargo-YES. Only 60% LTV. Also requires 12 months of seasoning.
Union Bank-YES. 65% LTV and limited to a few states in the Pacific NW.
TD Bank-YES. 75% LTV. Prime+1.74% interest. Total fees approx. $1580, no seasoning required.
PenFed-YES. 80% LTV. Still waiting on some more details from them.
US Bank-NO. Called multiple people and departments. Always the same answer.
Rental Property Investor · Braintree, VT · Member since 2013 · 35 posts · 13 votes
6y
Thanks for the updated post @Joe Roberts. I just started working with TD Bank after finding them on this list to do a HELOC on my investment property. Early on but so far so good with 75% LTV. Finding HELOC to be a much cheaper than doing a cash out refinance which was my original plan. Closing costs and prepaids were looking to be around $10,000 for cash out refi vs HELOC with minimal closing costs and can be rolled in if wanted.
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
6y
My list (pre-covid) has grown, as people contribute. As with many of these things, eat the fish and spit out the bones.
I've gleaned these lenders from the kind people on BP. I have used PenFed and TD Bank for HELOCs on investment property. Post back if you find another lender who serves you well, and I will add them to my list and pay it forward.
Ridge Lending All in One, first position HELOC (was off, last I saw, due to Covid. I expect it to come back)
AFCU does 80% LTV on NOO. Utah
Americafirst 80% LTV on noo 65% LTV Utah
Arvest Bank AR, OK, AL, MO
Bank of the west
BB&T will loan on a rental portfolio
BBVA Compass
Boeing employee credit union
California: Cal Coast Credit Union and Fremont Bank
Citizens Bank -Minnesota, only in-state. Kyle Potswald
Hurst Lending and Insurance Investment property HELOC in Texas. No seasoning.
Key Bank, FLorida flexible lender, HELOCs on second homes and rental properties. 90% LTV on primary.
Merchants Bank MN See Pavel Ushakov
PenFed - max 3 other properties, 89% LTV
Regions- yes HELOC but no LOC
SCCU Florida 70% LTV, 6.25% interest only, not LLC
Signature Federal Credit Union 75% LTV
Sound CU "non-owner occupied HELOC, capped at $150K and interest rates are prime + 2%, 3% or 4%, based on credit, not to exceed 70% ltv.”
S&T
TCF Bank
TD Bank
TIAA Direct was EverBank
Tower FCU, all states except TX, max 45 DTI, green card ok. Max of three rental properties. Automated appraisal.
Trustco
Union Bank, specializes in noo HELOC. KCMO, NE
Union Bank, MUFG.
US Bank
Vectra Bank
Wisdom from Ann Bellamy: I also never keep much cash in a bank account in the same bank where I have any mortgage. For example, I have a mortgage and operating account at Bank X for one of my businesses. I pull out most of the surplus cash from the operating account and put it in an account owned by the same company but in Bank Y. That way I get to determine how it's used, not the bank.
Rental Property Investor · Merced, CA · Member since 2020 · 10 posts · 0 votes
6y
I was just approved for a HELOC for my investment property in CA from PenFed within 15 minutes over the phone. If you would like more info let me know.
Investor · San Jose, CA · Member since 2015 · 52 posts · 9 votes
6y
@Kerry Baird - Thanks for the list. Some updates per my conversations with the lenders, Calcoast is doing 70% LTV on investment properties. Figure is not doing Helocs on investment properties at this time.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
6y
We just closed on a refi/Heloc on our primary residence with Affinity Federal Credit Union (in NJ), 10 year interest only, 10 year draw, 75% LTV, 2.99% for the first 6 months, then 3.25% or so for the remainder. No closing costs, but if I close the line within 3 years, I owe the $275 appraisal fee.
This is our second refi with Affinity. Super nice people, but very slow process both times. Over 2 months, and the first time was 8 years ago, so not COVID related. But a good experience. We have investment condos in FL, which they do not work with.
Previously, we'd had several Helocs on those FL rentals with TD Bank, and will be paying off the final one in October, when the interest-only 10 year term expires. They were great to work with during the recession, but the last few years now they have *not* been investor friendly, in our experience.
@Arthur Haggerty I would like to know more abt Pen Fed as well. Also, I'm not familiar with some of the terms, so could someone explain what 6 month seasoning is? I've had a Pen Fed acct for a year now,,but honestly never used it. I opened Navy Fed instead. Now I see Pen Fed offers a higher LTV for 1st lein on investment properties I may give them a shot.
Hey I have an investment property in Ohio and I am interested in leveraging the equity so I can do more real estate investing. does anyone know of any lenders that will do a HELOC for a LLC'S
Rental Property Investor · Braintree, VT · Member since 2013 · 35 posts · 13 votes
6y
I'm following back up on this thread. I did not get a HELOC like anticipated (working with TD Bank on investment property). They wouldn't tell me, even after asking, when the appraisal would be of if I could provide them information. We put a ton of value on the interior that you wouldn't see from a drive-by (Covid) so it didn't appraise for as much we anticipated (brand new heating system, all new hardwood floors throughout, brand new modern kitchen, etc.). Most of the work on the house was interior which is super frustrating. I had said in advance happy to provide photos, information for the appraiser but they didn't care. Just offered a cash out refinance using the lower amount which would amount to nothing after all the closing costs. Anyone have any further suggestions?
@Brooke Spaulding, Maybe you can try PENFED. After my post I did apply for a HELOC with them and approved. I am actualy still going through the process now. I have not closed yet. My property is in my name, 80% LTV they are giving me. As far as appraisal, they will conduct an electronic appraisal initially. I was not happy with those numbers, so they conducted a drive by. After the driveby report was issued to me, they asked if I would like to proceed or if I would like to have a interior appraisal done at my expense. I opted to go with the drive by appraisal. This was Friday, so my loan processor said she will submit and we will move forward. The process has been taking long, but they stated this at the beginning that it would take 45-60 days. I am about 40 days now. Since you have upgrades, if you apply with them, you can most likely tell them from the beginning you would like an interior apraisal, so it can be scheduled right away.