What are HELOC Requirements?

[Chris Parrish]

Does anyone know if HELOC loans have to follow the same federal guidelines as traditional mortgages? Example - like income restrictions, debt to income, and various other restrictions.

I would love to get a loan to purchase another owner occupied property, but I have not been self employed long enough to qualify for a conventional loan. I have two businesses and make a reasonable income, but my painting business hasn't been established for 2 solid years so I can't use that income. My other business (I call it that) is I am an realtor. I have been doing it for two years, but I have been told that my income averages over the last few years. The first year as an agent I was only licensed for like 3 months and only made $15k. So I have been told that it takes that income and averages it with my income last year (which drastically pulls me down obviously). So my lender told me I couldn't qualify for a traditional loan right now. Do HELOCS have the same requirements? Or is it different? 

Thanks in advance!

[Chris Mason]

Originally posted by @Chris Parrish:

Does anyone know if HELOC loans have to follow the same federal guidelines as traditional mortgages? Example - like income restrictions, debt to income, and various other restrictions.

Nope, each bank can/does make up whatever they want. I know someone here in the Bay Area doing stated income and no appraisal HELOCs, naturally your credit, etc, must be rock solid for that type of HELOC product.

The more liberal the HELOC, the higher the rate. The more conservative, the more appealing it'll be. It's not like Fannie/Freddie loans where everyone is really close, they vary greatly.