Heloc and DSCR option

[Erick Arana]

Hello everyone,

I am interested in pulling equity out of my investment property through a HELOC but some of the lenders and banks I spoke to state that no one offers HELOC's on investment properties. Does anyone know of any lenders/banks that offer investment HELOC's in California? Which leads to my second question if I cannot get the HELOC I am considering a DSCR loan, but curious if I could do a house hack with a DSCR loan?

[Ryan Muska]

First of all, there definitely are HELOCs on investment properties. Those banks do not know what they are talking about. You need to have a first mortgage, however, to do a HELOC on a property.

For the DSCR, what did you have in mind for house hacking?

[Wyatt Wolff]

There are HELOCs you can get, they are just much more strict about them now. Im not licensed in CA, otherwise Id help out!

[Jonathan Schilling]

I was also told this by my mortgage carrier. Located in alabama

[Erick Arana]

Quote from @Ryan Muska:

First of all, there definitely are HELOCs on investment properties. Those banks do not know what they are talking about. You need to have a first mortgage, however, to do a HELOC on a property.

For the DSCR, what did you have in mind for house hacking?

 Hello @Ryan Muska thanks for the reply. I do have a mortgage on what was originally my primary home two years ago. I turned this into a rental last year when I had to go back into the office full time. My next question is that it hasn't been paid down much but just to give you a quick breakdown the house has increased $80K over the last two years and was hoping to tap into that to use to help fund my next deal. I would like to get into a multi family home so I can house hack it. Which is why if I can't get the HELOC then I would be interested in a DSCR loan to be able to get into a multifamily and help with the mortgage.

[Ryan Muska]

For DSCR Loans, you cannot live in the property. That program is strictly for investment properties, not primary. That being said, you can use a primary home loan with rental income to subsidize it.

[Craig Jones]

Quote from @Erick Arana:

Hello everyone,

I am interested in pulling equity out of my investment property through a HELOC but some of the lenders and banks I spoke to state that no one offers HELOC's on investment properties. Does anyone know of any lenders/banks that offer investment HELOC's in California? Which leads to my second question if I cannot get the HELOC I am considering a DSCR loan, but curious if I could do a house hack with a DSCR loan?

These folks all do HELOCs on investment properties in California, confirmed in the last couple weeks:

Better.com

Fremont Bank

BMO / Bank of the West

[Richard Moreno]

I was just offered a Heloc from Better.com for my investment property in Providence RI. They have various rates to choose from but I am still looking for a bank with better options. TD bank also offered me something.

Has anyone used Better.com for HELOC?

[Andy Rousch]

I can't find a DSCR based HELOC program in NJ either. @Erick Arana any luck? I know that TD and Better do have HELOCS for investment properties, but I believe they are based on your tax returns/income. I'm looking for one that isn't tax return based and strictly DSCR based HELOCS 

[David Pearl]

I am not aware of any DSCR HELOCS. @Erick Arana - Happy to talk to you about a DSCR cash our refi to pull out equity so you have another option in the event you are unable to obtain a HELOC

[Brittany Minocchi]

Quote from @Andy Rousch:

I can't find a DSCR based HELOC program in NJ either. @Erick Arana any luck? I know that TD and Better do have HELOCS for investment properties, but I believe they are based on your tax returns/income. I'm looking for one that isn't tax return based and strictly DSCR based HELOCS 

Not a HELOC, but you could do a debt service-based closed end second. It would be lump sum, not a LOC. Expect 11-12%+ rates right now.

[Uriel Resendiz]

@Erik Estrada you able to help out with this?

[Erik Estrada]

Quote from @Uriel Resendiz:

@Erik Estrada you able to help out with this?

 Thank you Uriel! 

@Erick Arana

You can obtain a HELOC on an Investment property. It is a full doc loan, so lenders will need to verify you have the DTI to support the line of credit. The max CLTV is 70%, and will allow up to a $500k line of credit.

I am a little confused on the second question. Are you using the cash out proceeds from a DSCR loan on your investment property to house hack a new primary residence? Or are you seeing if you can qualify for a DSCR loan to house hack a primary residence? In either case, I would say most lenders will not allow the use of funds if its not for business purpose only and you definitely cannot owner occupy on a DSCR loan.