Struggling to Get a HELOC on My Paid-Off Home — Any Creative Lending Solutions?

[Lucas Vanroboys]

Hey BP community — I could really use some guidance here.

I’m in a unique income situation that doesn’t fit neatly into traditional underwriting. I’m in my first year post-grad with a modest W-2, plus 1099 income from a side hustle, and I live in a fully paid-off primary residence that I inherited. I rent out rooms for solid cash flow, but lenders won’t count that boarder income since it’s from my primary.

I’m trying to tap into the equity in this home to buy another property, but I keep hitting walls with traditional lenders. The two main issues I hear are:

1. Limited W-2 history
2. Roommate income not being recognized

The only offer I’ve gotten so far is from Figure, who uses a bank statement-based underwriting model. It’s promising, but they cap at $400K, charge high origination fees, and require a full draw at closing (which I don’t quite understand if I can just send the money back).

I’m surprised how hard it is to leverage equity in a debt-free home with solid income. Has anyone else found success with non-traditional lenders or bank statement-based HELOCs? Any recommendations or advice would be super appreciated!

Thanks in advance!

[Mike Grudzien]

Credit unions are generally more "user friendly" and pat of the local community with local decisions made.  Many have the ability to make "one off" deals or waive a requirement.

Start a relationship is anywhere from having an initial business meeting to opening an account.