DSCR seconds: the equity moves, the first stays.
A second lien priced on the property's rent. The first mortgage, its terms, and its prepay clock stay untouched.
Rent against both payments sets the ratio.
No refinance, no restart, no reopened stepdown clock.
We route to the desks writing investor seconds.
In short
Key takeaways
- Combined DSCR = monthly rent ÷ (first-lien P&I + taxes + insurance + HOA + the new second’s payment). Both liens sit in the denominator, and that one change drives everything else on this page.
- Typical floors sit near a combined ratio of 1.0 as of mid-2026, with better pricing tiers above it and CLTV caps at 70 to 80%.
- No personal income documents and no DTI. Entity vesting is normal: LLC on title, personal guaranty from the members.
- True investor HELOCs are scarce as of mid-2026. This closed-end second is the instrument that exists at scale, and like DSCR firsts it usually carries a prepayment penalty.
Written and reviewed by the Intel Loans, Inc. lending team · NMLS #2858705Updated July 2026
What this desk looks at
Pulling equity out of a rental used to mean refinancing a first you liked. The second lien exists so it does not.
First plus second against value sets the ceiling.
The rent must cover both payments at the program's ratio.
A second avoids triggering the stepdown you already priced.
The next acquisition, the renovation, the reserve fund.
The requirements
DSCR second lien requirements as of mid-2026
Fewer desks write DSCR seconds than firsts, and their matrices disagree more than agency grids ever do. The ranges below are typical across the desks we broker to as of mid-2026. Treat them as the shape of the field, not any single lender’s sheet.
Two numbers do most of the work: the combined ratio floor and the CLTV cap. Everything else adjusts around them. The worked example below shows which one binds first on a real file.
| Criterion | Typical range | What moves it |
|---|---|---|
| Combined DSCR floor | 1.0 on both liens' payments; stronger tiers from about 1.15 | Thin ratios cut the CLTV cap and push the pricing tier down |
| CLTV cap | 70 to 80% combined loan-to-value | Credit and ratio tier set the ceiling; condos often cap lower |
| Credit score | Floors around 680; 720+ widens the desk pool | Second position is riskier paper, so floors run above DSCR firsts |
| Loan size | From roughly $50,000; upper limits vary widely by desk | Balances under about $75,000 price worse at some desks |
| Eligible properties | 1-4 unit residential, including warrantable condos and townhomes | Non-warrantable buildings shrink an already small desk pool |
| Vesting | Individual or LLC with a personal guaranty from the members | The vesting must match how title is held under the first lien |
| Reserves | 3 to 6 months of the combined payment | Portfolios and ratios near 1.0 push the ask higher |
| Prepayment penalty | Stepdown structures, as on DSCR firsts | The structure is chosen at lock and it changes your pricing |
| First-lien seasoning | Commonly 6 to 12 months since the first lien closed | A recent cash-out on the first can extend the wait |
Three routes to the same equity
DSCR second vs cash-out refinance vs consumer HELOC
The deciding variable is the first mortgage. A cash-out refinance repays it in full and reprices every dollar of it; a second leaves it recorded exactly as it is and prices only the new money. A consumer HELOC leaves the first alone too, but it qualifies you personally, and for rental property that door is mostly closed as of mid-2026.
Run the comparison against your own first lien, not in the abstract; the first-lien mechanics live on the DSCR loans page. A first locked in 2021 with 27 years left is a different decision than one closed last spring, and the table assumes you know which you hold.
| DSCR second lien | Cash-out DSCR refinance | Consumer HELOC | |
|---|---|---|---|
| What happens to the first mortgage | Nothing. It stays recorded, on its existing terms | Repaid and replaced by a new, larger first | Nothing. It stays in place |
| Qualification basis | Rent ÷ the combined payments on both liens | Rent ÷ the new first's full PITIA | Personal income and DTI, documented with tax returns |
| Occupancy and purpose | Investment property only, business purpose | Investment property only, business purpose | Built for the home you occupy, under consumer rules |
| Availability, honestly | Written at scale across non-QM desks as of mid-2026 | Available wherever DSCR firsts are written | True investor lines are scarce; most banks decline rentals |
| When it wins | The existing first is worth keeping and the combined ratio clears | The existing first is expensive, or the file wants one payment | The collateral is your own home, not a rental |
What it is, precisely
A fixed second, not a line of credit
Closed-end means the money moves once. You draw the full amount at closing and the payment is level from the first month; there is no revolving balance to pay down and redraw. If a lender’s page calls this product an investor HELOC, read the note they actually close on, because most of what is marketed that way in mid-2026 is exactly this closed-end second.
Business purpose only, and that line is load-bearing. The closing documents certify the property is a rental and the money serves the investment; moving into the property, even for a season, is occupancy fraud that surfaces later in an insurance claim or a foreclosure file. If the equity you want sits in the home you occupy, stop here and start at equity options; the deposit-documented version is the bank statement HELOC.
LLC vesting is normal here, and so is the personal guaranty behind it. Nobody places a six-figure second behind another lender’s lien on an LLC’s signature alone, so the members sign. The entity file is the same set the first lien wanted: articles, operating agreement, EIN letter, good standing.
Worked example
The Tampa duplex, three years later
Hypothetical example for illustration only, not a quote or an offer. This is the Tampa duplex from the DSCR page, three years on. The value has grown to $520,000 and the first lien is paid down to $290,000. The two units now rent for $2,050 each, $4,100 a month.
The equity clears $100,000 but the ratio barely does: at 1.04 the file sits in the thinnest tier most desks price. Trim the second to $70,000 and the ratio moves to 1.11, and the pricing tier moves with it. On a second lien the ratio caps the loan before the equity does, so size the loan around the rent, not the appraisal, or the quote that comes back will be for less money than you counted on.
The honest part
What a DSCR second lien costs you
Second-lien money prices above first-lien money. If the property goes bad, the second-lien holder collects after the first, and every desk charges for that position. Per dollar borrowed, a DSCR second carries a higher payment than the same dollars added to a first. Whenever your existing first is expensive, run the cash-out refinance math before you accept the second-lien premium; sometimes replacing the first is the cheaper total.
The prepayment penalty is real money on the way out. Stepdown penalties are common on DSCR seconds, just as on firsts, because these are business-purpose loans and many states permit them (Florida, for instance). On an $85,000 second, paying off early in the first years of a stepdown can cost well over $1,500. If the plan is to clear the second quickly, buy the shorter penalty at lock, not at payoff.
Fixed closing costs hit small balances hardest. Appraisal, title, recording, and, in states that levy them, documentary stamp taxes cost roughly the same on a $60,000 second as on a far larger loan. In Florida, for instance, the note stamps alone run $0.35 per $100, $210 on that $60,000, plus $120 of intangible tax on the mortgage. We itemize every fee on the quote so you can weigh the loan against what it costs to originate.
How it compares for investors
The terms you locked stay locked.
The same DSCR math, applied to both liens.
Equity moves without disturbing the asset that earned it.
From scenario to closing
Price the second while the first stays put.
Send the numbers on both liens and the rent. We run the combined ratio the way each second-lien desk runs it and put the competing terms side by side, in writing.
Pull the first-lien numbers
Your current mortgage statement holds most of the denominator: P&I, escrowed taxes, insurance, and the balance. Add the HOA bill if there is one. Five minutes of paperwork.
Send the scenario
Address, estimated value, monthly rent, first-lien balance and payment, credit range, and how title is held. No hard credit pull at this stage.
We shop the second-lien desks
Fewer desks write DSCR seconds than firsts, and their grids disagree on ratio tiers and CLTV caps more than agency lenders ever would. We place the file where the combined math prices best.
Appraisal, then clear-to-close
A full appraisal sets the value and the market rent; the combined ratio locks from there. Your first mortgage is untouched, so there is no payoff to coordinate and the file runs leaner than a refinance.
Adjacent moves
If this isn’t quite your file
Questions we actually get
Why take a second instead of a cash-out refinance?
A cash-out refinance repays the entire first and replaces it with a new, larger loan priced today. If your existing first carries a payment you could not replicate now, that means repricing $290,000 of good debt to reach $100,000 of cash. The second leaves the first recorded as it is and prices only the new dollars, at second-lien pricing. We run both structures side by side, total monthly cost against cash in hand, and the cash-out refinance page walks the full decision.
Does my personal income matter on a DSCR second?
No. There are no tax returns, W-2s, paystubs, or employment calls in the file, and no DTI is calculated. The combined ratio replaces all of it: rent divided by both liens’ payments. Your credit report and reserves still matter, and LLC members sign a personal guaranty, because this is a fully underwritten mortgage; the property just carries the income side.
Can I close a DSCR second in my LLC?
Yes, and it is the normal structure. Most desks close DSCR seconds to LLCs with a personal guaranty from the members, the same as on firsts, and they want the entity documents: articles, operating agreement, EIN letter, good standing. The trap specific to seconds is title, because the vesting has to match how the property is already held under the first lien. Deeding from your personal name into an LLC to close the second can trip the first mortgage’s due-on-sale clause, so bring us the vesting question before you touch the deed.
Do DSCR seconds carry prepayment penalties?
Commonly, yes, because these are business-purpose loans and many states permit penalties on them (Florida, for instance). Desks use the same stepdown structures you see on DSCR firsts, and the structure you pick at lock moves your pricing. Match it to the plan: a hold-and-season file can take the longer stepdown for better terms today, while a bridge-to-payoff file should buy the short penalty up front. Read the note before closing. We read it with you.
Can one second lien cover several rentals?
Each DSCR second underwrites one property against its own rent and its own liens. There is no blended ratio across a portfolio; equity from three rentals means three seconds, each clearing its own combined floor and CLTV cap. The alternative is a cross-collateralized portfolio loan, a different product with a smaller desk pool. Where the portfolio does show up is reserves: desks commonly ask investors with many financed properties for more months of the combined payment.
Does short-term rental income count in the combined ratio?
Some desks accept it, under the same rules they apply on firsts: 12 months of platform receipts for a property with operating history, or a market projection with a haircut for a purchase without one. Expect a tighter CLTV cap and a higher ratio floor than a long-term lease would get. Condotels and buildings with rental desks shrink the pool further. The full short-term underwrite, including how desks read an AirDNA projection, is in DSCR for Airbnb.
Run the combined ratio before you count the equity.
Send the address, the rent, the first-lien statement, and your credit range. We come back with the combined math and the competing second-lien terms in writing.
This is not a commitment to lend or an offer of credit. All loan approvals are subject to credit review, underwriting, and property evaluation. Programs, terms, and conditions are subject to change without notice.
Intel Loans, Inc., NMLS #2858705. Licensed in Florida. Verify our licensing at nmlsconsumeraccess.org. Equal Housing Opportunity.
DSCR second liens discussed on this page are business-purpose loans secured by investment property; they are not consumer home equity products and are not for homes you or your family occupy.
Worked examples on this page are hypothetical illustrations for education, not quotes or offers. Your figures, including payments, taxes, insurance, and available equity, will differ.