HELOC on Rental Properties. PENFED

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HELOC on Rental Properties. PENFED

Tom Nguyen
Rental Property Investor · Austin Tx · Member since 2012 · 89 posts · 26 votes

I just want to give an update to those who want to get HELOC on Rental, especially through penfed.

They will give HELOC on rental up to 80% LTV

Owner can not own more then 3 properties. 

If owner have 4 properties, they can only do HELOC on the primary resident and not the rental.

just giving this information out so you don't have to go through register account with them.

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Kerry BairdPro Member
Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
3y

@Matthew Hall, PenFed stopped doing them on rental houses in 2021 or so, and haven't picked them up again.  They will do one on a primary residence.  There are others that will do HELOCs on rental properties. 

For example, Navy Federal will do up to 95% of your home's equity, 20 yr draw, 20 year repayment, can do interest only, they are stating "as low as" 7.750%.  From Navy's site:  "Home Equity Lines of Credit are available for primary residences, second
homes and investment properties. Primary residences are owner-occupied, principal residences only. Second home properties must be owner-occupied at some point during the year. Investment properties are
non-owner occupied."

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  • Frankie Woods
    Investor · Arlington, VA · Member since 2012 · 1k+ posts · 491 votes
    8y

    This is exactly what I found. I was really bummed about the "owner can not own more than 3 properties" aspect. 80% LTV is quite good for investment-grade HELOCS. Navy Federal does not have this restriction, but will only go to 70% LTV on rentals.

    0Reply
  • Kyle J.
    Rental Property Investor · Northern, CA · Member since 2012 · 5k+ posts · 5k+ votes
    8y
    Originally posted by @Tom Nguyen:

    Owner can not own more then 3 properties. 

    That’s pretty restrictive. So that’s if you just own them, whether or not they have mortgages or are owned free and clear?

    0Reply
  • Tom Nguyen
    OP
    Rental Property Investor · Austin Tx · Member since 2012 · 89 posts · 26 votes
    8y

    @Kyle J. They only count the properties with finance on it so if you own it free and clear then it will be OK. 

    0Reply
  • Craig Ts
    Member since 2018 · 23 posts · 3 votes
    7y

    What are other options ? has anyone considered commercial LOC backed by rental property ? Any experiences

    0Reply
  • David Whittle
    Member since 2018 · 4 posts · 0 votes
    7y

    @ Tom ....my property is owned free and clear ...its was bought in my LLC ..would PEnfed still give an equity loan ?

    0Reply
  • Cliff T.
    Rental Property Investor · San Francisco, CA · Member since 2016 · 215 posts · 42 votes
    7y

    What are the other requirements for the PenFed HELOC (e.g. W2 income)? And how long did the process take? What were the costs to set it up?

    0Reply
  • David Jackson
    Member since 2019 · 62 posts · 5 votes
    7y

    what if the property is in land trust?

    0Reply
  • Diego Salcedo
    Member since 2019 · 7 posts · 3 votes
    7y

    They count all properties regardless if they are financed or not. If you have four properties, they will only do the line of credit on your primary residence.

    0Reply
  • Remone R.
    Auburn, WA · Member since 2017 · 305 posts · 88 votes
    3y

    Update 2023* We did a Heloc on our primary residence(duplex) with Penfed at 80% ltv around 8% 3o year am with 10 I/O and 20 yr payback. Was a pretty smooth process. The only issue is if your property is in Texas you will need to have a homestead exemption to get the HELOC, which only took us a few days to get approved. And we do own a multifamily out of state as well, but no issues. Hope this helps

    0Reply
  • Matthew Hall
    Member since 2022 · 6 posts · 0 votes
    3y

    @Tom Nguyen is this product still available and if so what are requirements?

    0Reply
  • Kerry BairdPro Member
    Rental Property Investor · Melbourne, FL · Member since 2011 · 3k+ posts · 2k+ votes
    3y

    @Matthew Hall, PenFed stopped doing them on rental houses in 2021 or so, and haven't picked them up again.  They will do one on a primary residence.  There are others that will do HELOCs on rental properties. 

    For example, Navy Federal will do up to 95% of your home's equity, 20 yr draw, 20 year repayment, can do interest only, they are stating "as low as" 7.750%.  From Navy's site:  "Home Equity Lines of Credit are available for primary residences, second
    homes and investment properties. Primary residences are owner-occupied, principal residences only. Second home properties must be owner-occupied at some point during the year. Investment properties are
    non-owner occupied."

    1Reply
  • Vasa G.
    Investor · Washington, Washington D.C. · Member since 2011 · 34 posts · 5 votes
    2y
    Quote from @Frankie Woods:

    This is exactly what I found. I was really bummed about the "owner can not own more than 3 properties" aspect. 80% LTV is quite good for investment-grade HELOCS. Navy Federal does not have this restriction, but will only go to 70% LTV on rentals.


     real bummner!! Did you found another heloc option besides navy federal if you have more then 3 rentals? I think that TD bank offers heloc

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