Can you get a HELOC on an investment property?
Yes, but lenders treat it as a separate product, with their own eligibility rules and CLTV caps for non-owner-occupied property. Bank supervisors classify a loan on non-owner-occupied one- to four-family property as high loan-to-value above 85%, compared with 90% or more for a home the borrower lives in, and expect extra risk controls on such loans.[4] The examiner handbook also ties home equity pricing to the loan-to-value or combined loan-to-value ratio.[5]
| CLTV cap | Total debt allowed | Maximum line | Interest-only payment on the full line |
|---|---|---|---|
| 65% | $227,500 | $52,500 | $350 |
| 70% | $245,000 | $70,000 | $467 |
| 75% | $262,500 | $87,500 | $583 |
| 80% | $280,000 | $105,000 | $700 |
| 85% | $297,500 | $122,500 | $817 |
The payment column uses 8.00%, today's prime of 7.00%[8] plus the illustrative 1-point margin. Your quote may differ. For a home you live in, compare the limits on the HELOC LTV calculator.
How federal rules treat a rental-property HELOC
Credit to buy, improve or maintain a rental property you do not live in is treated as business-purpose credit, which Regulation Z exempts.[1] That matters because the HELOC rules in Regulation Z, such as the required disclosures and limits on when a lender can freeze or change the line, apply to open-end plans secured by a consumer's dwelling.[3]
| HELOC on your home | Line on a non-owner-occupied rental | |
|---|---|---|
| Regulation Z HELOC rules | Apply | Exempt when the credit buys, improves or maintains the rental |
| 3-day right to cancel | Yes, if it is your principal dwelling | No |
| High-LTV threshold for supervisors | 90% or more | Over 85% |
| Interest on your tax return | Home mortgage interest (Schedule A), if the money improves that home | Usually a rental expense if used for the rental |
The right to cancel within three business days covers credit secured by your principal dwelling only.[2] Occupancy is a test, not a label: the official commentary says a property is not non-owner-occupied if the owner expects to live in it for more than 14 days in the coming year.[1] A vacation home you use yourself may therefore count as your dwelling rather than a rental.
Worked example: the payment on a rental line
- Maximum line: $350,000 × 75% − $175,000 = $87,500.
- Rate: 7.00% prime + 1 = 8.00%.
- Drawing $50,000 for a renovation: interest only is $333.33 a month for 10 years, then $418.22 for 20 years.
- Paying principal from the start instead: $366.88 a month for the whole 30 years, with $82,078 of interest instead of $90,373.
- If prime rises 2 points, the repayment payment becomes $482.51. The rent has to cover that as well as the first mortgage.
Two loans on one rentalA line stacked behind the first mortgage raises the property's total debt payment. If rents fall or the unit sits empty, both payments are still due, and the property secures both loans.
Is the interest deductible?
Interest on a loan secured by a home other than your main or second home may be deductible if the money was used for business, investment or other deductible purposes, and the IRS routes interest incurred to produce rents to Schedule E rather than to the home mortgage interest deduction.[6] The 2026 draft of the same publication keeps that treatment.[7] How you spend the money decides where, or whether, it is deducted; the rules for your own home are on is HELOC interest tax deductible.
Alternatives to a rental-property HELOC
- A line on your own home comes with Regulation Z's HELOC protections and a higher supervisory high-LTV threshold, but puts your residence at risk for the rental's debt.
- A fixed home equity loan gives a set payment; see home equity loan vs. HELOC.
- Refinancing later: the options for replacing a line are on can you refinance a HELOC.
For a renovation, the home improvement loan calculator compares the cost of each way to pay.
Frequently asked questions
Can you get a HELOC on a rental property?
Yes, from lenders that offer non-owner-occupied lines, each with its own CLTV cap. Bank supervisors treat non-owner-occupied loans above 85% LTV as high-LTV, versus 90% or more for a home the owner lives in.[4]
How much can I borrow with a HELOC on an investment property?
The property value times the lender's CLTV cap, minus what you owe. On a $350,000 rental with $175,000 owed: $70,000 at 70%, $87,500 at 75%, $105,000 at 80%.
Does a rental-property HELOC have a right of rescission?
No. The three-business-day right to cancel applies only when the line is secured by your principal dwelling.[2]
Is a HELOC on a second home an investment property HELOC?
Not necessarily. Under Regulation Z's commentary, a property you expect to occupy for more than 14 days in the coming year is not treated as non-owner-occupied rental property.[1]
Sources
- Regulation Z § 1026.3 and Official Interpretation 3(a): business-purpose and rental-property credit
- Regulation Z § 1026.15, Right of rescission (open-end credit)
- Regulation Z § 1026.40, Requirements for home equity plans
- Credit Risk Management Guidance for Home Equity Lending (interagency guidance, SR 05-11)
- Comptroller's Handbook: Residential Real Estate Lending (home equity lines and loans)
- Publication 936 (2025), Home Mortgage Interest Deduction
- Publication 936 (2026), draft
- H.15 Selected Interest Rates (bank prime loan rate)