HELOC Count Against 10 Loan Limit?

5 Replies

I've been checking everywhere to find this answer, but can't find it (even after asking a HELOC loan officer), so figured I'd try here. Since I'm getting close to my 10 loan limit, I wanted to see if a future HELOC I get is considered a loan that goes against my 10 loan limit. Any thoughts?

The 10 loan limit is for agency financing. Since a HELOC isn't agency financing, I would be very surprised if it counts towards the limit.

On the other hand, a HELOC is great for short-term financing, but I would caution against using it for long-term buy & hold. You are probably better off getting a commercial loan on some or all of your portfolio and freeing up your ability to get more conventional loans.

It depends on the lender overlays. The ten loan limit is for agency financing, but different banks will count it differently. I have had banks tell me that every financed property counts as one, so my blanket loan on 4 properties counted as 4. I had one bank tell me that every loan counted so according to them I had 13 on 9 properties. You just need to shop around until you find a bank that is reasonable. If such a thing even exists.

@Greg Scott @Edward B.

Thanks for the info. It sounds like the key is to work with the an investor friendly lender and bank so the HELOC isn't counted as 1 of my 10.

@Greg Scott is right. It won't count to the 10 loan limit. @Edward B. nailed it on the overlays.

My employer won't finance more than 6 investments properties. Pretty much every bank/ lender will have additional overlays on top of Fannie/ Freddie minimums. I'm seeking the best terms possible on my first loans and then seeking the most flexible lender's to round out my financed piece of my residential portfolio.

Originally posted by @Michael S. :

I've been checking everywhere to find this answer, but can't find it (even after asking a HELOC loan officer), so figured I'd try here. Since I'm getting close to my 10 loan limit, I wanted to see if a future HELOC I get is considered a loan that goes against my 10 loan limit. Any thoughts?

 If it's vanilla Fannie with no overlays, the limit isn't actually on the number of loans. It's on the number of financed properties. So one property with 6 mortgages (yes, I have seen that) = 1 financed property. 

A HELOC is a mortgage. So if that property is otherwise free and clear it'll count as a financed property moving forward. If there's already a mortgage on it, then it's already counting towards your 10.

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