HELOC qualification: what it takes to get approved
To qualify for a digital HELOC on a primary residence, you typically need a FICO score of at least 620, combined loan-to-value at or below 85 percent, verifiable income that supports the new payment, and a property type that meets program guidelines.
No impact on your credit score to find out.
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The four things lenders look at
HELOC underwriting reviews four dimensions. Hit the bar on all four and you qualify. Miss any one and the application either gets denied or routed to an alternate path.
- Credit. Your FICO score and credit history.
- Equity. Your home value minus your existing mortgage debt, capped by CLTV rules.
- Income. Verifiable income that supports the new payment.
- Property. A property type that fits the lender’s eligible list.
The rest of this page works through each one with the actual numbers for our digital HELOC program. If you fit, you can apply for a HELOC in about 15 minutes. If you do not fit on one dimension, we will tell you which one and what your options are.
Credit score requirements
The minimum FICO score for our digital HELOC on a primary residence is 620. That is the floor. Some products in the same family use a 640 floor. Either way, the bar is lower than many borrowers assume.
Higher score, better pricing
Approval is binary. Pricing is a slope. A 620 FICO can qualify, but a 760 FICO gets a better rate. The lender prices credit risk into the margin. Stronger credit pulls the margin down. See how HELOC rates work for the full pricing picture.
Investment property is different
Investment property HELOCs currently require a higher score. We recommend 700+ on investment property files. If your score is below that threshold and you want a HELOC on an investment property, talk with a loan officer first.
Below the threshold
If your FICO is below 620, the HELOC is not a fit today. Options here: improve credit and reapply, work with a loan officer on alternate product paths, or address whatever is dragging the score down before applying.
Equity requirements (CLTV)
CLTV stands for combined loan-to-value. It is your total mortgage debt divided by your home value. The lender caps it at:
- 85 percent on primary residence
- 70 percent on investment property
Home value: $500,000
First mortgage balance: $200,000
85 percent of $500,000 is $425,000 total allowed mortgage debt.
Subtract the $200,000 first mortgage and you have up to $225,000 of available HELOC line.
Your home value comes from an automated valuation in most cases. The first mortgage balance comes from your current servicer. The math is straightforward. Want to model your own numbers? Use the HELOC calculator.
If your CLTV is already at or near the cap, the line size will be small or zero. If your CLTV is well below the cap, you have meaningful equity to work with. For definitions of CLTV, FICO, DTI, AVM, and other technical terms used on this page, see the HELOC glossary.
You just did the equity math. Get your real rate.
A soft credit check returns your actual HELOC rate in minutes. No commitment to proceed.
No impact on your credit score to find out.
Income and DTI requirements
You need verifiable income that supports the new HELOC payment on top of your existing debts.
What counts as verifiable income
W-2 wages, self-employment income, 1099 contract income, retirement income, and other documented income streams all count. The application supports linking up to three bank accounts through Plaid for self-employed and 1099 income verification. Tax documents and pay stubs can also be uploaded.
How DTI is calculated
DTI stands for debt-to-income. It is your monthly debt payments divided by your monthly gross income. The lender uses DTI to confirm you can support the new payment without overextending.
Lower DTI is better. The lender publishes a specific DTI cap that applies on the digital HELOC program. Talk with a loan officer for the current threshold.
If your DTI is high
If you are using the HELOC to consolidate higher-payment debt, the new debt payoff often improves your DTI calculation. A loan officer can model the before-and-after to see if a consolidation play opens the door. See HELOC for self-employed borrowers for income verification on non-traditional income.
Property eligibility
The property type has to fit the lender’s eligible list. Most common single-family housing types do.
Eligible property types
- Single Family Residence (SFR)
- Condo (warrantability requirements apply)
- Townhome
- Planned Unit Development (PUD)
- 2-to-4 unit residential properties
Eligible occupancy
Primary residence and investment property both qualify. CLTV caps differ between the two: 85 percent primary, 70 percent investment.
Excluded property types
Manufactured homes are not eligible. This is a hard exclusion, not a case-by-case decision. If your home is a manufactured home, the digital HELOC will not approve. Other product paths may exist; a loan officer can review options.
For state-by-state availability, see HELOC by state.
Other qualification factors
Citizenship
The digital HELOC program reviewed on this page is currently limited to US citizens. Lender Express has other HELOC products available for permanent residents. If you are a permanent resident interested in a HELOC, start with the form below and a loan officer will match you to the right product.
Bankruptcy seasoning
If you have a bankruptcy in your history, seasoning rules apply.
- Chapter 7: 48 months from discharge or dismissal.
- All other bankruptcy types (Chapter 13 and others): 12 months from discharge or dismissal.
After the seasoning period, you are considered for approval like any other applicant on the four-factor framework.
Lien position
The HELOC takes second position behind an existing first mortgage in most cases. If you own your home free and clear, the HELOC takes first position. The CLTV math still applies.
State availability
The digital HELOC is available across most states. A short list of states is currently excluded for regulatory or licensing reasons. The application checks your state before it accepts your file. See HELOC by state for the current eligible states.
What disqualifies most applications
Five common disqualifiers come up on the digital HELOC program. If you fit any of these, the digital HELOC is not a path today.
- FICO below 620 on primary residence. Approval bar.
- FICO below 700 on investment property currently.
- CLTV at or above 85 percent (primary) or 70 percent (investment). No equity room left.
- Recent bankruptcy still inside the seasoning window.
- Manufactured home as the subject property.
- State exclusion on your property’s state.
If you are close on one factor but solid on the others, talk with a loan officer. Sometimes a borderline file works. Sometimes a small change to one factor opens the door. The conversation costs nothing.
How to know for sure
A soft credit check tells you exactly where you stand. The pull does not affect your credit score. In about 15 minutes, the application returns a real rate offer if you fit the qualification bar.
If you fit, you finish the application online. Most files fund within a week. If you do not fit, you get a clear reason and a path to fix what is in the way.
For the full step-by-step, see how to apply for a HELOC. Start with the form below.
HELOC qualification, answered
What credit score do I need for a HELOC?
The minimum FICO is 620 for a primary residence on our digital HELOC program. Investment properties currently require a higher score (700+ recommended). Higher scores get better pricing, but anything 620+ on a primary qualifies for approval consideration.
How much equity do I need?
Combined loan-to-value caps at 85 percent for primary residence and 70 percent for investment property. If your home is worth $500,000 and you owe $200,000 on your first mortgage, you have up to $225,000 in available equity at 85 percent CLTV.
Can I get a HELOC if I am self-employed?
Yes. The application supports linking up to 3 bank accounts through Plaid for income verification. Tax documents and pay stubs can also be uploaded. The self-employed path is built into the application, not bolted on.
What if my DTI is high?
DTI guidelines apply. If you are consolidating debt with the HELOC, the new debt payoff often improves your DTI calculation. A loan officer can model the before-and-after to see if a consolidation play opens the door.
Can I get a HELOC on a manufactured home?
No. Manufactured homes are excluded from our digital HELOC program. This is a hard exclusion, not a case-by-case decision.
Can I get a HELOC if I had a bankruptcy?
Yes, with seasoning requirements. Chapter 7 requires 48 months from discharge or dismissal. Other bankruptcy types (Chapter 13 and others) require 12 months from discharge or dismissal. After the seasoning period, you are considered for approval like any other applicant.
Are non-US citizens eligible?
The digital HELOC program covered on this page is currently limited to US citizens. We have other HELOC programs available that work for permanent residents. Start with the form below and a loan officer will match you to the right product.
See if you qualify
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No impact on your credit score to find out.