A closed-end home equity loan on a primary residence typically caps at 80% to 85% combined loan-to-value in 2026, with a narrow band of non-QM programs stretching to 90%. On a second home the same lender usually drops that ceiling by 5 to 10 percentage points, landing between 75% and 85%. And on a non-owner-occupied rental? The ceiling tightens again, most often to 60% to 75%, with a 720+ FICO floor and six months of PITIA reserves (covering both liens, not just one).
But most of these numbers aren’t federal. Fannie Mae doesn’t purchase standalone closed-end seconds. Freddie Mac began a limited pilot in December 2024 for certain closed-end seconds on primary residences, with first-lien seasoning, loan-size, program-volume, and time limits. Outside that narrow pilot, caps still come from each lender’s portfolio and non-QM appetite.
HELOAN CLTV caps at a glance (2026)
Ranges verified on August 2, 2026. Caps shift quarterly, so verify current thresholds with an approved lender before applying.
| Occupancy | Typical CLTV cap | Best case | Min. FICO | Reserves |
|---|---|---|---|---|
| Primary residence | 80%–85% | 90% (non-QM niche) | 620–680 | 2 months |
| Second / vacation home | 75%–85% | 85% | 680–700 | 2–6 months |
| Investment / rental | 60%–75% | 75%–80% (niche) | 700–720 | 6+ months PITIA |
Ranges above reflect published 2026 lender guidelines from The Mortgage Reports, AD Mortgage, Deephaven, Lower, and Rate.com. The pattern holds across nearly every lender that offers all three occupancy types. Primary is widest. Second home compresses. Investment is the tightest.
The CLTV formula, in one line
Here’s the formula: your first-lien unpaid balance plus the new HELOAN, divided by appraised value. So on a $500,000 primary residence with a $300,000 first mortgage, a lender capping at 85% CLTV allows a combined lien position of $425,000. Subtract the $300,000 first lien, and the maximum new HELOAN is $125,000. Push the cap to 80%, and the ceiling drops to $100,000. Push to 90% at a non-QM lender, and it opens up to $150,000.
The formula’s identical for all three occupancy types. What changes is the cap.
Appraised value on a closed-end second usually comes from a full interior appraisal on larger loan amounts and an AVM or drive-by product on smaller ones. Value’s set at underwriting – not by what the borrower thinks the property is worth. For alternative valuation paths, see our guide on no-appraisal HELOAN alternatives.
Primary residence: the widest tier
Typical CLTV cap: 80% to 85%. Most large banks and credit unions treat 80% as the house rule and stretch to 85% for stronger credit and clean DTI. Minimum scores and pricing tiers vary by lender; specialist programs can publish lower minimums than retail banks while still reserving their best pricing for stronger profiles.
Where 90% actually lives. Deephaven’s Equity Advantage Closed-End Second and AD Mortgage’s closed-end second both advertise CLTV up to 90% on primary residences with DTI up to 50% and loan amounts up to roughly $500,000 to $1,000,000. But these are non-QM and portfolio programs, not conventional mortgages. Verify current terms on the lender’s live product page before assuming availability.
The 90% tier isn’t a retail-bank product. It’s a specialist offering – and you have to actually look for it.
Credit, DTI, and reserves. Two months of PITIA reserves is a common ask on a primary. DTI ceilings vary by lender. The named 90% non-QM programs from Deephaven and AD Mortgage publish maximum DTI ratios up to 50%, subject to the rest of the file.
Worked example. A $500,000 primary residence with a $300,000 first mortgage. At 85% CLTV the borrower can pull $125,000. At 90% at a non-QM lender, $150,000. Whether a 660 score qualifies for either tier depends on the specific program and the rest of the file; Deephaven publishes a 660 minimum for its Equity Advantage product, but qualification at the maximum CLTV is not automatic.
Second home and vacation property: usually 5 to 10 points tighter
Typical CLTV cap: 75% to 85%. Lenders want the borrower to retain 15% to 25% equity after the new lien. The Mortgage Reports notes that most second-home HELOAN and HELOC products land in the 75% to 80% band, with a small number of programs reaching 85% for 740+ FICO borrowers.
Credit, DTI, and reserves. Minimum FICO usually rises to 680 or 700. Reserves climb to two to six months of PITIA covering both properties (yes, both – not just the second home). DTI norms track primary standards.
Common lender caveats. Bank of America caps its HELOC on second homes at $500,000 regardless of available equity, per its published product page. Loan-size ceilings on closed-end seconds are less publicly advertised, but they follow the same shape. And rural and vacation-market properties may trigger appraisal overlays or reduced CLTV based on comparable-sale scarcity.
Worked example. A $600,000 vacation home carrying a $250,000 first lien. At 80% CLTV the combined lien allowed is $480,000. Subtract the first, and the maximum new HELOAN is $230,000. At 75%, the cap drops to $200,000. Same borrower, same property, $30,000 gap based on the lender’s cap alone.
Shop the cap, not the rate.
Investment property (non-owner-occupied rental): the tightest tier
Typical CLTV cap: 60% to 75%. Most 2026 investment HELOAN programs cluster at 70% to 75% for well-qualified borrowers. Weaker profiles fall to 60% to 65%, and some lenders decline non-owner HELOAN requests outright. Lower and Rate.com both cite 70% as the working ceiling for their investment-property closed-end seconds. For a deeper look, see our guide on a home equity loan on a rental property and the HELOC counterpart.
Why the tighter cap? Default risk, mostly. Rental borrowers walk before primary-home borrowers when cash flow turns – it’s the mortgage they drop first when things get tight – and standalone investment seconds have no agency securitization exit, so the lender holds the risk on its own books.
Higher FICO floor, deeper reserves. Minimum FICO rises to 700, with 720 more common. Reserve requirements typically hit six months of PITIA covering the first mortgage, the new HELOAN, taxes, insurance, and any HOA on the subject property. Some lenders count only the subject reserves. Others (and this catches borrowers off guard more than it should) require reserves on every financed property the borrower owns.
Rate and fee posture. Rate margins on non-owner HELOANs run notably higher than the same lender’s owner-occupied second. Origination fees and appraisal costs run higher too. And loan-size ceilings? Often lower.
When lenders decline. When the property’s a short-term rental, a two-to-four unit, or sits in a market with soft rent trends, the file may be declined even with strong borrower credit. Cash-out refinancing on the first lien becomes the fallback path. Conventional cash-out on a one-unit investment property caps at 75% LTV under Fannie Mae guidelines.
Worked example. A $400,000 single-family rental with a $180,000 first lien. At 70% CLTV the combined lien allowed is $280,000, and the new HELOAN maxes at $100,000. At 65%, it drops to $80,000. And at 75% at a niche lender (with 740 FICO and 12 months of reserves), the ceiling rises to $120,000.
What moves your cap up or down
Credit score’s the primary lever. Per lender rate sheets summarized by The Mortgage Reports in 2026, a 760+ FICO borrower can reach 75% to 80% CLTV on an investment property where a 660 borrower gets capped at 65% to 70% or declined outright. DTI is the second lever. Limits are program-specific, and the named 90% primary-residence non-QM programs publish maximum DTI ratios up to 50%.
Loan size interacts with the cap too. Many lenders reduce CLTV by 5 points once the combined balance passes conforming limits. Property type matters. Condos and 2 to 4 unit buildings usually take a 5-point haircut versus single-family detached. And state overlays apply. Texas caps home equity products at 80% CLTV under its constitutional Section 50(a)(6). Alaska, Hawaii, and Puerto Rico carry lender-specific overlays worth checking locally.
HELOAN, HELOC, or cash-out refi
HELOC caps often run 5 points tighter than HELOAN caps at the same lender because the future draw exposure is unknown. But the occupancy pattern still holds: primary widest, second home middle, investment tightest. For the mechanics behind the tighter HELOC number, see our post on how CLTV stacking works on a HELOC.
Cash-out refi LTVs are agency-governed and more predictable: conventional cash-out at 80% on a primary, 75% on a second home, and 75% on a one-unit investment. FHA allows 80%. VA program rules permit up to 100% of reasonable value, including the funding fee, though many lenders apply lower overlays such as 90% to 95%. So a HELOAN can allow more headroom on a primary than a conventional or FHA cash-out refinance. Cash-out refinancing may allow more on an investment when the first-lien rate isn’t worth protecting. Our HELOAN vs cash-out refinance guide walks through the full product comparison.
Estimating your borrowing capacity before you call a lender
- Get a defensible value estimate. Pull two AVMs (a lender AVM if available, plus your county assessor’s estimate) and one recent comparable sale within a quarter mile.
- Confirm your first-lien payoff figure with your servicer. Not your last statement – interest accrues daily.
- Apply the CLTV cap for your occupancy tier from the table above, then subtract the payoff. That’s your rough new HELOAN ceiling.
- Stress-test the payment against your DTI at a 43% cap.
- Confirm reserves. Match or exceed the months your occupancy tier requires.
Bring the value estimate, payoff figure, two most recent pay stubs, and last two years of tax returns to the first lender conversation. Loan officers who know what they’re doing structure the file to surface these numbers before it lands in underwriting, not after it comes back with conditions attached.
Frequently asked questions
What’s the maximum CLTV on a home equity loan for a primary residence in 2026? Most lenders cap at 80% to 85% CLTV. A narrow non-QM segment reaches 90% for borrowers who meet each program’s full credit, DTI, reserve, and property requirements. Deephaven publishes a 660 minimum FICO and DTI up to 50%, but the 90% tier isn’t broadly available at retail banks.
Can I get a home equity loan on an investment property? Yes, at a subset of lenders. Expect a 60% to 75% CLTV cap, a 720+ FICO floor, and six or more months of PITIA reserves covering both liens.
How much equity do I need to keep in a second home? Most lenders require the borrower to retain 15% to 25% equity after the new lien, which corresponds to a 75% to 85% CLTV cap. Loan-size ceilings may cap the draw further even when the CLTV math allows more.
Do all lenders use the same CLTV formula? The math’s the same: (first-lien balance + new HELOAN) ÷ appraised value. But the cap applied to that ratio is set by each lender, not by regulation.
Is HELOAN interest tax-deductible on a second home or rental? Deductibility depends on how proceeds are used and on current IRS guidance. See our guide on HELOAN and HELOC interest deductibility in 2026 before assuming a deduction.
Bottom line
Occupancy’s the largest factor in a HELOAN CLTV cap after credit score. Primary residence tops out at 80% to 85%, with a non-QM path to 90%. Second home compresses to 75% to 85%. Investment sits at 60% to 75%, with a 720+ FICO floor and six months of PITIA reserves.
And caps shift quarterly and vary by lender. Confirm current thresholds with a lender that offers your specific occupancy type before applying.
