Why lenders draw this line
A line of credit on residential property is underwritten as a consumer-style loan to a person: your credit, your income, your promise to pay, and a lien on property you own. An LLC breaks that chain — the entity owns the property, the entity cannot be qualified on a credit score and bank deposits, and the loan documents, disclosures and foreclosure process are all built around an individual borrower. Programs that lend to entities exist, but they are business-purpose loans with different paperwork and pricing, not home equity lines.
Option one: title in your name, then the line
Deeding the property from the LLC to yourself is a recorded transfer, and before you do it there are things to check with your attorney and your accountant, not with us. Your existing first mortgage may contain a due-on-sale clause that a transfer technically triggers; lenders rarely act on a transfer to the owner personally, but "rarely" is not "never" and you should know what your note says. Your landlord insurance policy names the LLC and must be reissued in your name. Your liability protection changes, which was the reason for the LLC in the first place. Some states charge a transfer tax on the deed. And the new line will require you to keep title in your name for as long as the line is open — moving the property back into the LLC afterward would put you in breach of the line's terms, so plan on holding it personally.
Option two: leave it in the LLC, use a different loan
A DSCR cash-out refinance lends to the LLC, qualifies on the property's rent instead of your income, and replaces the first mortgage with a larger one. You lose the existing first mortgage and its rate, and you get a lump sum rather than a reusable line. If the existing first is cheap, that trade-off is the whole decision, and the comparison page walks through it. If the existing first is expensive or small, the DSCR refinance is often the better product anyway.
What about the "LLC HELOC" I saw advertised?
A few portfolio lenders and credit unions will place a line on an LLC-titled rental, usually in limited states, with a personal guarantee and pricing closer to a commercial line. They exist; they are not the digital, days-to-fund product described here, and they come and go. If one fits your property we will tell you, and we will tell you when the DSCR refinance beats it.
Deciding
Ask three questions. How good is the existing first mortgage? How much does the LLC's liability protection matter for this property? And do you want a reusable line or a one-time draw? Cheap first, protection you can replace with insurance and a good umbrella policy, reusable line: move title and take the line. Expensive first, protection you will not give up, one-time need: keep the LLC and refinance. Your attorney weighs in on the protection question; we weigh in on the loans.
Questions investors ask about this
Can an LLC get a HELOC?
Not on the programs described here, which lend to individuals. A handful of portfolio lenders offer entity lines in some states with a personal guarantee; the more common route is a DSCR loan, which lends to LLCs by design.
Can I deed the rental to myself, get the line, and deed it back?
The line's terms will require title to stay in your name while it is open, so deeding back afterward breaches the agreement. Treat the transfer as permanent for the life of the line.
Does transferring from my LLC trigger the due-on-sale clause on my first mortgage?
Technically it can, depending on your note. Lenders seldom act on a transfer to the owner personally, but read the note and ask your attorney before you record anything.
What happens to my insurance?
The landlord policy is reissued in your name before closing. Keep the liability limits and consider an umbrella policy, since the LLC's protection no longer applies to that property.
What is the alternative that keeps the LLC?
A DSCR cash-out refinance: the LLC borrows, the rent qualifies the loan, and you receive a lump sum. You give up the existing first mortgage to do it.
Keep reading
- How a HELOC on a rental worksWhat is different from the line on your own house, and why most banks say no.
- HELOC vs. cash-out refinance on a rentalKeep the first mortgage you already have, or replace it.
- Behind a DSCR or portfolio first mortgageLien position, subordination and prepayment questions.
- Is the interest deductible?Interest tracing in plain English, with the regulation cited.