SBA: Use a HELOC to keep your primary residence out of it?

by a searcher from University of British Columbia

1 week ago

Do SBA lenders frown upon borrowers taking out a HELOC that reduces their home ownership below 25% such that the SBA won't ask for a lien on the home?

The cash would be useful as working capital so I'm considering it but don't want to create problems for the deal.

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lender from Eastern Illinois University

If you have less than 25% equity in your home, the SBA does not require the Bank to take a lien on your home as additional collateral. Availability on a home equity loan does count against the equity available in the home. However, that does not mean a Bank still will not take the home as additional collateral. Even though it is not required by the SBA, some lenders will still require it to help shore up the deal. I hope this helps to clarify. If you have more questions on SBA loans, you can ping me here or directly at --@----.com

1 week ago | like reply | 0 likes

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