Taking out HELOC from our home when we are renting the MIL basement

[Jordan James Redford]

Last year we took out a HELOC on our previous home around this same time. We then rented that out and purchased our current home. We used our HELOC to model the basement into a MIL and are renting it out. We wanted to take a HELOC or loan out on this house now with the appreciation and added value of the basement, but were told we can't do that because we are renting out the basement.
I've looked for rules and haven't seen that anymore. Am I missing something, or do we label it as HELOC on an investment property since it is our main residence, but are also renting?