Closed-End Second (CES) — Investment Property Equity

At a glance

A closed-end second lien for non-owner-occupied investment property in eligible states. Pull equity behind a low-rate first mortgage — stand-alone or piggyback — with light-doc Bank Statement/1099, P&L Only, or DSCR qualification. Loan amounts run $50,000 to $750,000, combined LTV goes to 80%, and combined lien balances are allowed up to $3.5M at 80% CLTV or $4M at 75% CLTV.

Program highlights

• Non-owner-occupied (investment) property only
• Loan amounts $50,000 – $750,000
• Up to 80% CLTV (75% CLTV on the largest lien balances)
• Max combined lien balance $3,500,000 at 80% CLTV / $4,000,000 at 75% CLTV
• Light-doc options: Bank Statement/1099 (12 or 24 mo), P&L Only (12 mo), or DSCR (min 1.00)
• Max DTI 50% on income-documented options
• Credit score tiers 660 / 680 / 700 / 720
• No reserves required on stand-alone CES; piggyback purchases require a copy of assets for the 1st lien
• Stand-alone CES may be used to augment qualifying income on all doc types except DSCR (not a stand-alone income doc type)
• Full appraisal required (1004 / 1025 / 1073)
• DSCR option: minimum 1-year prepayment penalty required where allowable by state
• Properties listed for sale in the last 6 months are not eligible
• Not available in U.S. Territories or MI, NJ, NY, TN, and WV
• US Citizens, Permanent Resident Aliens, and Non-Permanent Resident Aliens with US credit (NPRA not eligible for DSCR)

How funding works

1. Send the property address, first-lien balance, and estimated value
2. We confirm the CLTV tier and the best doc type for your file
3. Full appraisal ordered; income or DSCR docs uploaded to a secure portal
4. Clear to close — your first mortgage stays exactly where it is

Worked scenarios

Cash-out behind a 3.5% first — $600k rental

Borrower: Bank-statement investor, FICO 720, first lien $300k

Property value: $600,000 · Loan amount: $180,000

Outcome: 80% CLTV supports a $180k second while the low-rate first mortgage stays untouched.

DSCR second on a stabilized duplex

Borrower: LLC borrower, DSCR 1.10, FICO 700

Property value: $750,000 · Loan amount: $187,500

Outcome: 70% CLTV DSCR tier funds the equity draw with a 1-year prepay where state-allowed.

Why this program

Refinancing a whole first mortgage to access equity can cost investors several points of rate. A closed-end second leaves the first lien in place and prices only the new money.

CLTV caps step down as credit score, documentation path, and loan size move; DSCR and P&L Only tiers may carry lower leverage.

Because it is closed-end, the full amount funds at closing with a fixed payment — unlike a HELOC, there is no draw period or variable rate to manage.

Frequently asked

Does this replace my existing mortgage?

No. A closed-end second sits behind your current first lien, so a low-rate first mortgage stays exactly as it is.

What is the maximum I can borrow?

$750,000, subject to an 80% combined LTV and a combined lien balance cap of $3.5M at 80% CLTV or $4M at 75% CLTV.

Can I qualify without tax returns?

Yes — Bank Statement/1099 (12 or 24 months), P&L Only (12 months), and DSCR (minimum 1.00) options are all available.

Is an appraisal required?

Yes, a full appraisal (1004, 1025, or 1073 depending on property type) is required on every file.

Can I use it on my primary residence?

No. This program is non-owner-occupied investment property only.

Where is the CES program available?

CES is available in eligible U.S. states, but not in U.S. Territories, Michigan, New Jersey, New York, Tennessee, or West Virginia.