Is a DSCR home equity loan the same as a HELOC?

No. A HELOC is a revolving line you draw on over time. A DSCR home equity loan is a closed-end second mortgage: you receive the funds at closing and repay a fixed amount, and it qualifies on the rental property's cash flow.

Do I have to refinance my first mortgage?

No — that is the point of it. The first mortgage stays in place untouched, and the home equity loan closes behind it in second position.

How long do I need to have owned the property?

More than six months. If you have owned it for less, look at a DSCR cash-out refinance instead.

Can I use it on a short-term rental?

Ask us with the details. Requirements for short-term rentals differ by program, and some require a long-term lease.

DSCR Home Equity Loan for Rental Properties

Keep the first mortgage. Borrow the equity.

Plenty of investors are sitting on two things at once: a first mortgage with a rate they would never get again, and years of equity they cannot reach without giving that rate up. A DSCR home equity loan solves exactly that.

It is a closed-end second mortgage on your investment property. You receive the funds up front, the first mortgage stays exactly as it is, and the second is qualified the DSCR way — on the property's rental income, not your personal income or tax returns.

How it works

The lender looks at the combined loan-to-value of both mortgages and at whether the property's rent covers its total housing cost, including the existing first mortgage payment and the new second.

Second position only — it closes behind the mortgage you already have.
Fixed rate, so the second does not move when the market does.
Qualified on the property's DSCR rather than personal income.
For investment properties held as rentals.

Who it fits

It fits investors who have owned the property for more than six months, have a lease in place on a long-term rental, and have some experience owning investment property. First-time investors and very recently purchased properties are a better fit for other options — including a DSCR cash-out refinance, which has no waiting period on select programs.

Home equity loan or cash-out refinance?

There is no single right answer, and the math decides it:

If your first mortgage rate is well below today's, a second usually keeps your overall cost lower.
If the first is close to today's rates — or you want to restructure the whole loan — a cash-out refinance can make more sense.
If you bought the property recently, the cash-out refinance is the one that can close now.

We will lay both out side by side for your property before you decide.

What to have ready

Your current mortgage statement, the lease, proof of insurance and taxes, and a short note on what the funds are for. If the property is held in an LLC, have the entity documents too.

Every file is different. Guidelines, pricing and eligibility vary by lender and are subject to credit approval and property eligibility — we’ll walk you through exactly what applies to yours.