If you own a rental property with a great mortgage rate, refinancing the whole thing just to pull cash out may not make much sense.
Fortunately, a cash-out refinance isn’t your only option.
Qualified real estate investors may be able to use a Home Equity Loan, also called a HELOAN, as a second mortgage behind the existing first loan.
That means you can potentially access rental-property equity without replacing the mortgage you already have.
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Updated for October 30 2026
Can You Get a Home Equity Loan on an Investment Property?
Yes, although these programs can be harder to find than home equity financing on a primary residence.
Many large retail banks don’t offer second mortgages on rental properties, although some portfolio lenders, credit unions and specialty mortgage lenders do.
At Andes Mortgage, investment-property HELOAN options are available, including Non-QM programs that may qualify investors using rental income rather than traditional personal-income documentation.
How Does a DSCR Home Equity Loan Work?
DSCR stands for Debt Service Coverage Ratio.
Instead of relying primarily on your W-2s, pay stubs or personal tax returns, a DSCR-style program looks at the rental property’s income and overall loan profile.
That makes this type of financing especially useful for:
Real estate investors
Self-employed borrowers
Investors with complicated tax returns
Borrowers with multiple financed properties
Property owners who don’t qualify easily using traditional personal income
Credit, equity, property value, rental income and other underwriting requirements still matter.
How Much Equity Can You Take Out?
For a second mortgage, the number to understand is combined loan-to-value, or CLTV.
CLTV includes:
Your existing first mortgage + the new Home Equity Loan
compared with the value of the property.
Let’s use the example from the video.
Your investment property is worth:
$500,000
Using a conservative 70% CLTV example:
$500,000 × 70% = $350,000
Now assume you owe:
$200,000 on the first mortgage
That leaves:
$350,000 − $200,000 = $150,000
So the property could potentially support approximately a $150,000 Home Equity Loan under that hypothetical 70% CLTV scenario.
Actual maximum leverage varies. Andes’ current HELOAN programs may reach approximately 70%–75% CLTV on investment properties for stronger qualifying profiles.
What Credit Score Do You Need?
Current Non-QM HELOAN options at Andes generally begin around a 680 credit score.
But qualifying at the minimum isn’t the same thing as getting the highest available leverage.
Current program ranges show stronger investment-property options around:
680–699: approximately 70% CLTV
700+: potentially up to approximately 75% CLTV
depending on the lender, loan amount, property and complete borrower profile.
So the advice from the video still holds:
700+ puts you in a better position.
Home Equity Loan vs. HELOC on a Rental Property
This distinction is important.
A Home Equity Loan gives you a lump sum at closing and generally comes with a fixed rate and fixed monthly payment.
A HELOC gives you a revolving credit line that you can draw from, repay and potentially use again during the draw period.
If you know you need one specific amount of money, a HELOAN may make more sense.
If you want ongoing access to equity for additional investments, renovations or portfolio growth, a DSCR HELOC may be the better tool.
That page should remain Andes Mortgage’s primary resource for investors specifically searching for a revolving rental-property equity line.
Why Not Just Cash-Out Refinance?
Because a cash-out refinance replaces your existing mortgage.
A Home Equity Loan typically sits behind that first mortgage instead.
So if you locked in an attractive rate years ago, you may be able to keep that mortgage untouched while still accessing some of the equity you’ve built.
Learn more about Home Equity Loans or use the Home Equity Loan Calculator to estimate your numbers.
If you’d rather have a revolving line instead of a lump sum, compare the DSCR HELOC program.
Compliance Disclaimer
This content is for general educational purposes only and is not an offer or commitment to lend. Home Equity Loan, Non-QM and DSCR-style programs, minimum credit scores, maximum CLTV, rental-income requirements, loan amounts, reserves, rates, fees and property eligibility vary by lender and borrower profile and may change without notice. Examples are illustrative only. Loan approval is subject to credit review, property valuation, rental-income analysis, lender guidelines and underwriting. Andes Mortgage LLC, NMLS #2187991. Marcos Zambrano, NMLS #988935. Equal Housing Opportunity.
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