Borrowing Against a Rental — Lendia California
Can I Get a HELOC on an Investment Property I Own Free and Clear?
Reviewed by Ramez Malki, NMLS 315466 · Last verified October 2026
If you own a California rental outright, you have the most equity to borrow against. The harder question is which product will lend on a non-owner-occupied property, because many standard HELOCs are written for the home you live in.
Why a rental is treated differently
Lenders price and limit loans on rental property more conservatively than on an owner-occupied home. That usually shows up as a lower maximum loan-to-value, a higher minimum credit score, a higher rate and a full appraisal. Our HELOC property types page explains which property types and occupancies standard lines cover, and our Non-QM HELOC property types page shows what a Non-QM program adds for investors.
What free and clear changes
With no mortgage, a new line would be the only loan on the property. That makes it a first-lien position, which is a different structure than the second-lien HELOC most people picture. Read how that works in Can I use a Non-QM HELOC as a first lien and first-lien vs. second-lien HELOCs.
Your realistic options on a free-and-clear rental
| Option | What it is | Worth considering when |
|---|---|---|
| Non-QM HELOC | A line of credit that can be written on investment property | You want to draw funds in stages and the property fits the program |
| Cash-out refinance | A new first mortgage that pays you a lump sum | You want one fixed payment and know the total you need |
| DSCR-based financing | Qualifies mainly on the rent the property earns | You would rather not rely on personal income documents |
Illustrative example (not a quote)
Suppose a rental is worth $600,000 and has no mortgage, and the owner wants $120,000. That is 20% of the value, so it leaves a wide cushion even if the lender caps the combined loan-to-value well below the 80% or 85% you may see on a primary home. See Non-QM HELOC LTV limits for the ranges we describe for investment property.
What to bring
- The deed or vesting information, and the name on title (personal or LLC)
- Current insurance on the property
- Lease agreements or a rent history, if the property is tenanted
- Proof of income or the alternative documents described on our income documentation page
Frequently asked questions
Do I need a tenant in place?
Not always. A vacant property can still qualify, but the appraisal and the rental documents change. See financing a vacant rental.
Will the lender require a full appraisal?
Expect one. Lenders generally want a full appraisal on a rental rather than an automated estimate.
Can I borrow if I live in another state?
Yes, as long as the property is in California. See out-of-state owners.
Related guides
- Borrowing against a California rental: overview
- How much equity you need
- HELOC or cash-out refinance on a rental
- Non-QM HELOC property types
- Get a rate quote
Rates and terms depend on your credit, property and loan amount; approval requires qualification. Contact Ramez Malki, NMLS #315466, at Lendia, Inc. (NMLS #295073 | Licensed by the California DRE #01877189). Lendia lends only on California properties.
- Borrowing Against a California Rental: Overview
- HELOC or Cash-Out Refinance for an Investment Property: Which Is Better?
- Renovating a Rental: Should I Use a HELOC or a Cash-Out Refinance?
- Will the Lender Value My Rental As-Is or After Renovation?
- How Much Equity Do I Need to Borrow Against an Investment Property?
- Do Investment Property HELOCs Have Higher Rates Than Primary-Residence HELOCs?
- What Fees Should I Compare Between a HELOC and a Cash-Out Refinance?
- Can I Qualify for a Rental HELOC or Cash-Out Refinance If I Am Self-Employed?
- Does My Credit Score Affect Which Option I Get on a Rental?
- Is an Investment Property HELOC Payment Fixed?
- Can an Out-of-State Owner Borrow Against a California Rental?
- How Do I Finance a Vacant Rental That Is Under Renovation?
- What Do Lenders Check When You Borrow Against a Rental Property?