Home / HELOC / Paid off does not mean the equity is cash.
Updated September 2026
HELOC guide
Paid off does not mean the equity is cash.
No mortgage is the easiest second-lien file, because there is no first lien to subordinate. The HELOC becomes the only loan, still usually capped near 80 to 85% of value. A $400,000 paid-off home does not produce a $400,000 line. In the six states, primary, second home, and rental can all be the property. A DSCR HELOC can qualify a paid-off rental on rent. Outside those states, use DSCR cash-out on a rental instead of waiting on a HELOC we do not offer.
Sending a file is not an approval and not a credit pull. We text the same business day. We do not call. If we can structure it, we name the door. If we cannot, we say so.
The screen
| Paid-off | Result |
|---|---|
| Existing lien | None |
| New lien | The HELOC |
| Typical cap | 80–85% of value |
| Rental | DSCR HELOC if the rent qualifies |
What we fund
- Free-and-clear primaries
- Paid-off rentals in the six states
- Owners who refuse a new 30-year mortgage
What we still need. Short list.
- The first mortgage balance, rate, and whether it can stay.
- A value we can support, and the cash you actually want.
- The property state. HELOC is only GA, FL, TN, AL, NC, and SC.
- Income path: full doc, bank statements, or rent on a DSCR HELOC.
Questions
Is this a mortgage again?
Yes. A HELOC is a lien. Paying it off is how the house becomes free and clear again.
Do you need income if the house is paid off?
Equity is not income. The program still has a qualifier unless it is a no-ratio screen, and that screen is tighter.
Can I borrow a small amount?
Yes. Do not open a huge line if you need a small one, unless the pricing is better and you understand the temptation.
Related
These are the guidelines we screen. They are not a promise that your file hits the maximum. Credit-event seasoning, occupancy, and property condition still have to be confirmed. Not a commitment to lend. We text. We do not call.