The Traditional HELOC, With a Rate That Never Moves
A fixed rate for the life of the loan, a first-lien option that can replace your mortgage, and up to 90% CLTV at a 680 score. Full documentation and a human underwriter. Here is how it works, who it fits, and where it does not.
Most HELOCs float with the market. The Flex Equity HELOC can lock your rate for the whole loan, and it can sit in first place on your home.
The Flex Equity HELOC is a home equity line of credit from PRMG. You pick a fixed rate for 15, 20, or 30 years, or a variable rate with an interest-only period. You can use it as a second lien behind your mortgage, or as a first-lien HELOC on a home that is paid off or close to it. A Flex Equity HELOC is full documentation and manually underwritten, so tax returns count. It is built for owners who want a true fixed rate, and for self-employed borrowers an automated HELOC cannot read. It is not available in Hawaii or New York. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: September 25, 2026
Flex Equity HELOC Requirements: The Short Answer
You need a 640 minimum credit score, a debt-to-income ratio of 50% or less, and a refinance (not a purchase). Owner-occupied homes go to 90% combined loan-to-value at a 680 score on lines up to $399,999, and at 740 on lines up to $750,000. Every file is full documentation and manually underwritten. Fixed rates run 15, 20, or 30 years. No cash reserves are required.
As of Q3 2026 (September 2026): The minimum credit score for a Flex Equity HELOC is 640 (PRMG Flex Equity HELOC Product Profile, 09/17/2026). Owner-occupied 1–4 unit homes can reach 90% CLTV at a 680 score on lines up to $399,999, and at a 740 score on lines up to $750,000 (PRMG Flex Equity HELOC Product Profile, 09/17/2026). The maximum debt-to-income ratio is 50%, and the qualifying payment is a fully amortized payment on the maximum line (PRMG Flex Equity HELOC Product Profile, 09/17/2026). The maximum line is $750,000 in first-lien position and $500,000 in second-lien position (PRMG Flex Equity HELOC Product Profile, 09/17/2026).
The rest of this page shows each rule, the tradeoffs, and when a Lightning Equity Hybrid HELOC or a closed-end second fits better.
What Is the Flex Equity HELOC?
The Flex Equity HELOC is a traditional home equity line of credit. It has a 3-year draw period. During those 3 years you can borrow against the line, pay it down, and borrow again. After the draw period ends, the balance pays off over the rest of the term.
It comes in two versions. The fixed-rate HELOC keeps one rate for the life of the loan. The variable-rate HELOC follows the Prime Rate and starts with an interest-only period of 3 or 10 years.
Two things set it apart from most HELOCs. First, the fixed rate is real. It does not reset. Second, it can be a first-lien HELOC. That means the line itself is the only mortgage on the home. If your house is paid off, or your mortgage balance is small, the Flex line can pay off the old loan and become your main mortgage.
Every Flex Equity file is manually underwritten by PRMG’s Specialty Underwriting team. A person reads your pay stubs, W-2s, or tax returns. That is slower than an automated HELOC. It is also why Flex can approve files an automated system turns down.
Flex Equity HELOC Requirements At A Glance
This is the full eligibility picture in one table. Every figure comes from the PRMG Flex Equity HELOC Product Profile dated 09/17/2026.
| Requirement | Flex Equity rule |
|---|---|
| Minimum credit score | 640 (Classic FICO; lowest middle score of all borrowers) |
| Maximum CLTV | 90% owner-occupied 1–4 unit; 80% second home and investment (1 unit) |
| Maximum DTI | 50% |
| Qualifying payment | Fully amortized payment on the maximum line |
| Maximum line | $750,000 first lien; $500,000 second lien |
| Lines of $400,000 or more | 740 score required |
| Minimum line | $25,000 fixed ($50,000 in Texas); $50,000 variable |
| Transaction type | Refinance only. No purchase, no piggyback |
| Cash reserves | None required |
| Ownership seasoning | None on primary or second home; 6 months on title for investment |
| Maximum acreage | 20 acres (10 acres in Texas) |
| Total financing cap | $3,000,000 primary; $2,000,000 second home or investment |
| Financed properties | Up to 10 |
| States | Not available in Hawaii or New York; first lien also not in Pennsylvania |
State rules that change the answer
- Texas: 1 unit, owner-occupied only, 80% maximum CLTV, 10 acres maximum. The fixed-rate minimum line is $50,000. The only variable option is the 30-year with a 3-year interest-only period.
- West Virginia: a loan that refinances a mortgage closed in the past 24 months is ineligible.
- Pennsylvania: second-lien Flex lines are available. First-lien Flex lines are not.
Properties Flex Equity will not lend on
Manufactured and mobile homes, condotels, co-ops, working farms and ranches, barndominiums, leasehold, tribal lands, homes with more than one ADU, 2–4 unit investment properties, second homes with more than 1 unit, homes listed for sale in the past 120 days, homes where solar is the only power source, mixed use, and vacant homes. New-construction condo projects must be Fannie Mae warrantable and reviewed by PRMG’s condo team.
Flex Equity CLTV Limits by Credit Score
CLTV means combined loan-to-value. It adds your first mortgage and the full HELOC line, then divides by the home’s value. On a $500,000 home with a $250,000 mortgage, a 90% CLTV leaves room for a $200,000 line. The score you need depends on occupancy and line size.
| Occupancy | Credit score | Max CLTV | Max line |
|---|---|---|---|
| Primary, 1–4 unit | 740+ | 90% | $750,000 (1st lien) / $500,000 (2nd lien) |
| Primary, 1–4 unit | 700–739 | 90% | $399,999 |
| Primary, 1–4 unit | 680–699 | 90% | $399,999 |
| Primary, 1–4 unit | 660–679 | 80% | $399,999 |
| Primary, 1–4 unit | 640–659 | 70% | $399,999 |
| Second home, 1 unit | 740+ | 80% | $750,000 (1st lien) / $500,000 (2nd lien) |
| Second home, 1 unit | 680–739 | 70% | $399,999 |
| Investment, 1 unit | 740+ | 80% | $750,000 (1st lien) / $500,000 (2nd lien) |
| Investment, 1 unit | 680–739 | 70% | $399,999 |
| Texas, primary, 1 unit | 660+ / 640–659 | 80% / 70% | Per score tier above |
Here is where most HELOC pages go wrong. They list one maximum CLTV and one minimum score as if they come together. They do not. On Flex Equity, 90% starts at 680, but only on lines up to $399,999. Any line of $400,000 or more needs a 740 score, at any CLTV.
Not sure which CLTV tier your score and home value land in? We run the math on your actual numbers before you apply.
Check My CLTV TierFixed vs. Variable Flex Equity HELOC: Terms and Repayment
Both versions have a 3-year draw period. What happens after that depends on which one you pick.
| Feature | Fixed-rate HELOC | Variable-rate HELOC |
|---|---|---|
| Terms | 15, 20, or 30 years | 20 or 30 years |
| Draw period | 3 years | 3 years |
| Interest-only period | None | 3 or 10 years |
| Repayment after draw | 12, 17, or 27 years, fully amortizing | 20-yr: 17 (after 3 IO) or 10 (after 10 IO); 30-yr: 27 or 20 |
| Rate | Fixed for the life of the loan | WSJ Prime plus a margin; can change monthly |
| Floor / lifetime cap | Not applicable | 4.00% floor / 18.00% lifetime cap |
| Minimum line | $25,000 ($50,000 in Texas) | $50,000 |
| Minimum initial draw | Greater of $25,000 or 75% of the line | Greater of $50,000 or 75% of the line |
| Recast | At every draw and payment, life of loan | At every draw and payment, interest-only period only |
| Annual fee | $99 | $99 |
| Prepayment penalty | None | None |
Additional draws are not allowed for the first 90 days after closing. After that, each draw is at least $1,000 and cannot exceed the line. We do not publish rates. Pricing depends on your score, CLTV, lien position, and term.
The variable interest-only payment jump
A variable line with a 10-year interest-only period has a low payment for 10 years. Then it has to pay off the full balance in the 10 or 20 years that remain. On a 20-year line, that means the whole balance amortizes over just 10 years. The payment can roughly double overnight, and the rate can move with Prime at the same time. If you pick interest-only, plan for that date on day one.
First-Lien HELOC: When the Line Is Your Only Mortgage
A first-lien HELOC is a line of credit that holds first position on your home. There is no mortgage ahead of it. Flex Equity offers this on both the fixed and the variable version, up to a $750,000 line.
Who uses it:
- Owners with a paid-off house who want access to cash without a lump-sum loan.
- Owners with a small first-mortgage balance, where the line pays off the old loan and leaves room to draw later.
- Owners who want one payment and one lien instead of a mortgage plus a second.
The limits: a first-lien Flex line cannot be used to buy a home. It is not available in Hawaii, New York, or Pennsylvania. It always requires a full interior appraisal or a qualifying prior-use appraisal. An automated valuation is not allowed in first position.
If you have a low-rate first mortgage you want to keep, a first-lien HELOC is the wrong tool. It would pay that mortgage off. Use a second-lien Flex line, a Lightning Equity HELOC, or a closed-end second instead.
How Flex Equity Underwriting Actually Works
Flex Equity is a full-documentation program. PRMG’s Specialty Underwriting team reviews every file by hand. There is no automated approval.
Income and self-employed borrowers
Wage earners document income with pay stubs and W-2s. Self-employed borrowers use tax returns. Per the PRMG Flex Equity expanded guidelines (effective 5/26/2026), self-employed for 5 years or more means the most recent year of personal and business returns plus that year’s transcripts. Self-employed for less than 5 years means 2 years of returns and 2 years of transcripts. All borrowers need a 2-year work history.
This is the file an automated HELOC often cannot read: a business owner with K-1s, Schedule C income, or a mix of W-2 and business income. A human underwriter can. See our guide to HELOCs for self-employed borrowers.
DTI, credit events, and housing history
- DTI: 50% maximum. You can pay off debts to qualify. Paying a debt down to lower its payment does not count.
- Credit events (measured from disbursement): foreclosure 7 years; short sale, deed-in-lieu, or mortgage charge-off 4 years; Chapter 7 or 11 bankruptcy 4 years; Chapter 13 2 years from discharge or 4 from dismissal. More than one event in 7 years is not allowed.
- Housing history: primary residence 1x30x24 with no lates in the last 6 months. Second homes and investment properties 0x30x24.
- Credit: Classic FICO only. A hard pull is required for final approval. You need 3 tradelines (one open and active in the last 6 months) or a mortgage paid as agreed for 36 months.
Who can be a borrower
Borrowers must be individuals: U.S. citizens, permanent residents, and eligible non-permanent residents. LLCs, corporations, and investment trusts cannot be the borrower. Non-occupant co-borrowers, co-signers, and guarantors are not allowed. Power of attorney is not allowed at closing.
Self-employed and told your returns do not work for a HELOC? We read the returns the way the underwriter will before you apply.
Review My Tax ReturnsThe Qualifying Payment Rule: What Most HELOC Pages Get Wrong
Most people assume a HELOC is qualified on what they draw, or on the interest-only payment. Flex Equity does neither. The qualifying payment is a fully amortized payment on the maximum line, even if you only take the minimum draw at closing.
Here is the math on a $200,000 line. The rate below is an example only, used to show the rule. It is not a quote or an offer.
Example: $200,000 line (example rate 8.00%)
- Gross monthly income: $10,000
- Current debts (first mortgage, car, cards): $3,650
- Initial draw at closing: $150,000 (75% of the line)
- Interest-only on the draw: $1,000 (not what we qualify on)
- Qualifying payment, $200,000 amortized over 30 years at 8.00%: $1,468
- DTI = ($3,650 + $1,468) / $10,000 = 51.2%. Over the 50% cap.
Fix: a $150,000 line (same example rate)
- Same income and same debts
- Initial draw at closing: $112,500 (75% of the line)
- Qualifying payment, $150,000 amortized over 30 years at 8.00%: $1,101
- DTI = ($3,650 + $1,101) / $10,000 = 47.5%. Under the cap.
- Other fix: pay off a debt in full at closing. Paying it down does not count.
The takeaway: a bigger line than you need can cost you the approval. Size the line to the project. A shorter term, like 15 or 20 years, raises the qualifying payment on the same line, so it can push DTI higher too.
The Tradeoffs, Stated Plainly
Flex Equity is the right HELOC for some files and the wrong one for others. Here is what you give up.
- You draw at least 75% at closing. The minimum initial draw is the greater of $25,000 (fixed) or $50,000 (variable), or 75% of the line. You pay interest on that draw from day one.
- Manual underwriting takes longer. A person reviews full documentation. It is not a days-long, automated close.
- Refinance only. No purchase transactions and no piggyback at closing on a home purchase.
- $99 a year. There is an annual maintenance fee on both versions.
- Variable interest-only payment shock. The payment jumps when the interest-only period ends, and the rate can move monthly.
- No additional draws for 90 days. After that, draws are $1,000 minimum.
- Classic FICO and a hard pull are required for final approval.
What you get in return: a rate that does not move on the fixed version, no prepayment penalty, no cash reserves required, a first-lien option, and a human who can approve tax-return income.
When Lightning Equity or a Closed-End Second Fits Better
We offer more than one way to tap equity. The right one depends on speed, how you document income, and whether you want a line or a lump sum.
| If you want… | Best fit | Why |
|---|---|---|
| The fastest close with a clean W-2 file | Lightning Equity Hybrid HELOC | Automated and built for speed |
| One fixed payment on a lump sum, no line | Closed-end second | Fixed rate, fixed term, one payment |
| A fixed rate for the life of a line | Flex Equity (fixed) | 15, 20, or 30 years, rate never resets |
| A HELOC with no mortgage ahead of it | Flex Equity (first lien) | First-lien option up to $750,000 |
| 90% CLTV with a 680 score | Flex Equity | 90% owner-occupied at 680 on lines to $399,999 |
| Approval on tax returns, self-employed | Flex Equity | Full documentation, manual underwriting |
If speed matters most and your income is simple, start with Lightning Equity. If you want one lump sum and never plan to redraw, a closed-end second mortgage is simpler. For every program side by side, see the full HELOC comparison.
Torn between Flex Equity, Lightning Equity, and a closed-end second? Tell us the goal and we will match the program to your file.
Compare My OptionsFlex Equity HELOC Myths and Misunderstood Rules
❌ Myth: “Every HELOC has a variable rate.”
✅ Fact: The Flex Equity fixed-rate HELOC keeps one rate for the life of the loan, on 15, 20, or 30-year terms.
❌ Myth: “A HELOC always sits behind a first mortgage.”
✅ Fact: Flex Equity offers a first-lien HELOC, up to $750,000, in every eligible state except Pennsylvania. The line can be the only mortgage on the home.
❌ Myth: “They qualify me on what I actually draw.”
✅ Fact: The qualifying payment is fully amortized on the maximum line, not the draw and not the interest-only payment.
❌ Myth: “Self-employed people cannot get a HELOC without bank statements.”
✅ Fact: Flex Equity uses tax returns and manual underwriting. Five-plus years self-employed can qualify on one year of returns.
❌ Myth: “I need months of reserves in the bank.”
✅ Fact: Flex Equity requires no cash reserves.
❌ Myth: “I can use a HELOC to help buy my next house.”
✅ Fact: Flex Equity is refinance only. Purchase and piggyback transactions are not allowed.
Flex Equity HELOC Frequently Asked Questions
What are the Flex Equity HELOC requirements?
The Flex Equity HELOC requires a 640 minimum credit score, a debt-to-income ratio of 50% or less, and a refinance transaction. Owner-occupied homes can reach 90% CLTV at a 680 score on lines up to $399,999. Lines of $400,000 or more need a 740 score. Income is fully documented and manually underwritten. No cash reserves are required. It is not available in Hawaii or New York.
What is a fixed rate HELOC?
A fixed rate HELOC is a home equity line of credit whose interest rate does not change. The Flex Equity fixed-rate HELOC keeps one rate for the life of the loan on 15, 20, or 30-year terms. It has a 3-year draw period, then pays off over 12, 17, or 27 years. There is no interest-only period on the fixed version.
What is a first lien HELOC?
A first lien HELOC is a home equity line of credit that holds first position on your home, with no mortgage ahead of it. Flex Equity offers first-lien lines up to $750,000. It suits paid-off homes or small mortgage balances. It cannot be used to buy a home and is not available in Hawaii, New York, or Pennsylvania.
Can I get a HELOC at 90% CLTV with a 680 credit score?
Yes. The Flex Equity HELOC allows 90% CLTV at a 680 credit score on an owner-occupied 1 to 4 unit home. At 680 the maximum line is $399,999. A line of $400,000 or more requires a 740 score. At 660 the limit drops to 80% CLTV, and at 640 it drops to 70%. Texas caps CLTV at 80%.
Can I get a HELOC if I am self employed with tax returns?
Yes. Flex Equity is full documentation and manually underwritten, so tax returns are how self-employed income is qualified. If you have been self-employed 5 years or more, the file uses the most recent year of personal and business returns plus transcripts. Under 5 years, it uses 2 years of returns and 2 years of transcripts.
What is the minimum credit score for a Flex Equity HELOC?
The minimum credit score is 640 on an owner-occupied home, which allows up to 70% CLTV. Second homes and investment properties start at 680. The score used is Classic FICO, and with three bureaus it is the lowest middle score of all borrowers. A hard credit pull is required for final approval.
What is the maximum DTI for a Flex Equity HELOC?
The maximum debt-to-income ratio is 50%. The HELOC payment counted in that ratio is a fully amortized payment on the maximum line amount, not the interest-only payment and not your initial draw. Paying off a debt in full to qualify is allowed. Paying a debt down to lower its payment is not.
How much do I have to draw at closing on a Flex Equity HELOC?
You must draw at least 75% of the line at closing, or $25,000 on a fixed line and $50,000 on a variable line if that is greater. On a $200,000 line, that is $150,000 at closing. Additional draws are not allowed for 90 days after closing, and each one after that is at least $1,000.
Can I use a Flex Equity HELOC to buy a house?
No. The Flex Equity HELOC is refinance only. Purchase transactions are not allowed, and it cannot close as a piggyback at the same time as a purchase mortgage. It is designed for owners who already have the home and want to access their equity, either behind an existing mortgage or as the only lien.
Which states is the Flex Equity HELOC available in?
The Flex Equity HELOC is not available in Hawaii or New York. First-lien lines are also not available in Pennsylvania. Texas is limited to 1-unit, owner-occupied homes at 80% CLTV on up to 10 acres. In West Virginia, a loan that refinances a mortgage closed within the past 24 months is ineligible.
Can I get a HELOC on an investment property or second home?
Yes, on a 1-unit property. Flex Equity allows 80% CLTV at a 740 score on lines up to $750,000, and 70% CLTV at 680 on lines up to $399,999. Investment properties need 6 months on title and a 0x30x24 housing history. 2 to 4 unit investment properties and multi-unit second homes are not eligible.
What happens when the interest-only period ends on a variable HELOC?
The payment rises because the full balance starts paying off over the remaining term. On a 20-year variable Flex line with 10 years interest-only, the balance amortizes over the last 10 years. The rate can also change monthly with the Prime Rate, within a 4.00% floor and an 18.00% lifetime cap.
Does the Flex Equity HELOC have an annual fee or prepayment penalty?
There is a $99 annual maintenance fee on both the fixed and variable versions. There is no prepayment penalty and no early closure fee. You can pay the line down or pay it off at any time. Standard PRMG closing fees apply at origination, and we review them with you before you sign.
How long after bankruptcy or foreclosure can I get a Flex Equity HELOC?
Foreclosure needs 7 years. A short sale, deed-in-lieu, or mortgage charge-off needs 4 years. Chapter 7 or 11 bankruptcy needs 4 years from discharge or dismissal. Chapter 13 needs 2 years from discharge or 4 years from dismissal. Waiting periods are measured to the disbursement date, and more than one event in 7 years is not allowed.
Is Flex Equity or Lightning Equity the better HELOC?
It depends on your file. Lightning Equity is automated and built for speed on simple income. Flex Equity is manual and full documentation, so it fits self-employed borrowers on tax returns, owners who want a rate fixed for the life of the loan, and anyone who needs a first-lien HELOC. We compare both on your numbers before you apply.
Related Pages
About the Author
J.D. Peck is an Area Manager and Mortgage Loan Originator (NMLS #314883) with the JD.Mortgage Team at Paramount Residential Mortgage Group, Inc. (NMLS #75243), based in Colorado Springs. 25+ years, 3,100+ closed loans, Scotsman Guide Top Originator 2026. Lending in 49 states. New York excluded.
Last updated: September 25, 2026. Flex Equity facts sourced from the PRMG Flex Equity HELOC Product Profile (09/17/2026) and Comparison Matrix (rev. 09/17/2026).
Lock a Rate on Your Equity That Never Moves
We check your CLTV tier, size the line to your DTI, and read your income the way the Specialty Underwriting team will. You see whether Flex Equity, Lightning Equity, or a closed-end second fits before anything is submitted.
Source: JD.Mortgage Team at PRMG, Flex Equity HELOC: Fixed-Rate and First-Lien HELOC Options, updated September 2026, https://jd.mortgage/flex-equity-heloc/
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