HELOC or LOC on primary (tax deductible)?

[Daria B.]

Hi-

Hopefully I'm stating this correctly:

HELOC -> has closing costs and is the equity being pulled out of the house up to a % of what the lender will lend on the property (ie 60% or 75% LTV). If there is a 1st note already this is the 2nd, otherwise if property has no note, then HELOC is the 1st.

LOC -> no closing costs and credit is secured by the value of the property based on what amount the lender will lend. Still a little sketchy on this one as to how much.

Please enlighten if this is incorrect.

My question lends itself to getting money for purchase and rehab investment property. 

Hypothetical numbers: PropertyA can be purchased for $90k with needing $20k-30k rehab. 

• Primary residence has 100% equity.
• An existing investment property has 100% equity while another property has some equity and has a 1st note.

I'm told that "primary residences" are easier to process for getting the equity from and they have better interest rates rather than investment properties due to risk.

If either of these (heloc or loc) are used on a primary residence, is the interest tax deductible for the rental (SchE)?

Thanks