Which properties qualify for a HELOC?
On the line we place, the home must be an eligible property type — single-family residence, townhome, planned unit development, condominium, duplex, 3–4 unit property — on 20 acres or less. Property identified as anything else, such as a stock cooperative, vacant land, or commercial or mixed-use property, isn’t eligible.
These are the requirements for the home equity line we place. Other lenders set their own guidelines, and some are more flexible.
The property gets two checks: what type of property it is, and what it’s worth.
What qualifies
- Eligible: single-family residence, townhome, planned unit development, condominium, duplex, 3–4 unit property.
- Not eligible: stock cooperatives (including many Laguna Woods Village units), vacant land, commercial and mixed-use property, and parcels over 20 acres.
- Occupancy: a primary residence, second home or investment property all qualify; an investment property needs a 680+ credit score.
- Mixed-use isn’t eligible. Eligibility follows how the unit is recorded, so a live-work loft or a unit above a shop can fail on classification even when it looks residential.
- No condo questionnaire. Building-level tests such as association litigation, the share of units rented out or reserve levels are not part of this decision.
How the home is valued
An AVM comes first. If one isn’t available, or isn’t reliable enough to use, a desktop appraisal such as a broker price opinion may be ordered instead. If no valuation can be produced, the application can’t go forward. A desktop appraisal also adds time.
An AVM is least reliable on homes that don’t look like their neighbors, which is when a desktop appraisal is used: Eichlers, estate lots, equestrian parcels, and custom hillside homes.
The condition standard
When a desktop appraisal is used, it includes a condition rating. A home rated below average condition isn’t eligible.
How you own it
You need to own the property directly, or through an LLC that meets the LLC rules. A home bought in the last 90 days isn’t eligible, and neither is an applicant added to title in the last 90 days. See recently bought or added to title.
Think this applies to your property?
Send the details. Matt reviews them and replies himself, even when the answer is no.
Eligible Property Types: questions
Yes, if the application meets the other requirements. Condominiums are an eligible property type, along with single-family homes and townhomes.
No. Stock cooperatives aren’t eligible, because you own shares and an occupancy right rather than the property itself.
Stock cooperatives and tenancy-in-common shares; mixed-use and commercially zoned property; buildings of five or more units; manufactured and mobile homes, log homes, houseboats and timeshares; parcels over 20 acres; leasehold and ground-lease homes; property held in a land trust, an irrevocable trust or a life estate; a home with a reverse mortgage; and a home bought or deeded to you within the last 90 days.
Yes, if the parcel is 20 acres or less, the home is an eligible property type, and the application meets the other requirements.
These are the requirements for the home equity line we place. Other lenders set their own guidelines, and some are more flexible.
The other main requirements
Credit Score Requirements
On the line we place, 640 is the minimum for a home you live in. Second homes and investment properties need 680, and th…
Learn moreDebt-to-Income Requirements
On the line we place, debt-to-income can be up to 50% of your gross monthly income. Over that, you’re not automatically …
Learn moreDeclined by an Online HELOC
Many declines are about timing or structure, not about you. A home bought, or an applicant added to title, in the last 9…
Learn moreFind out where you stand before you apply
Credit, income, property and title each have their own rule. Most declines trace back to one of them, and many can be fixed before you apply.