How to Use a HELOC from Your Primary Home to Renovate a Vacation Property

Last updated: July 2025

Homeowners can use a home equity line of credit (HELOC) secured by their primary residence to fund improvements on a second home. 

Even if that second property is a vacation rental, weekend retreat, or future retirement home, a HELOC could be a viable way to finance renovations. 

A primary home equity financing strategy is popular because second homes may not qualify for traditional home equity financing on their own. 

A HELOC drawn from the primary residence allows homeowners to:

• Avoid refinancing the second property
• Access equity at a lower interest rate than credit cards or personal loans
• Pay contractors and suppliers directly as work progresses

Lenders do not require the funds to be spent on the same property securing the loan. That flexibility makes a HELOC an ideal solution for cross-property renovations.

Start an application with HomeEQ to see what renovation funds you could access in mere minutes.

How does the process work for funding a vacation property renovation?

Once approved for a HELOC based on your primary residence, you can draw funds as needed during the draw period (typically 5–10 years). 

These funds can be used to:

• Replace roofing or siding
• Remodel kitchens or bathrooms
• Add decks, patios, or outdoor kitchens
• Upgrade HVAC, windows, or insulation
• Install security systems or smart home features

Some homeowners use the line for seasonal repairs, such as plumbing winterization or storm damage fixes. 

Others use it for lifestyle improvements, making their vacation property guest-ready for short-term rentals or family visits.

Illustrative scenario:

Tom and Alicia used a HELOC from their main home in Portland to fund a $60,000 upgrade to their coastal cottage. They remodeled the kitchen, added a second bathroom, and installed a new deck, transforming the property into a high-earning summer rental. Drawing funds as each contractor’s invoice came due allowed them to manage their cash flow without draining their savings.

Calculate your HELOC borrowing power.

What are the benefits of using a HELOC for vacation home renovations over other financing methods?

A HELOC can provide unique advantages when compared to other financing tools like personal loans, credit cards, or a cash-out refinance:

1. Lower interest rates: Because a HELOC is secured by your home, rates are usually lower than unsecured financing.
2. Flexibility: Borrow only what you need, when you need it, ideal for phased or unpredictable renovation timelines.
3. Avoid refinancing your second home: Second-home mortgage products may have higher rates or stricter requirements. Using equity from your primary residence avoids these hurdles.
4. Interest-only options: During the draw period, many HELOCs allow you to make interest-only payments.
5. No restrictions on property use: Unlike certain renovation loans, HELOCs don’t require your vacation home to be your primary residence.

What risks or limitations should homeowners be aware of?

While a HELOC can be a powerful funding tool, it’s important to consider these potential drawbacks:

• Your primary home is collateral: If you fall behind on payments, you risk foreclosure on your main residence, not the vacation property.
• Variable interest rates: HELOCs often come with adjustable rates. Rising interest rates can increase monthly payments over time.
• Tax deduction limitations: Interest may not be tax-deductible unless used to improve the property securing the loan (i.e., your primary home).
• Market volatility: Renovating a vacation property based on projected rental income can be risky if the market changes or bookings decline.
• Liquidity concerns: Tying up home equity in a second property limits your ability to access it for emergencies or retirement planning.

Before drawing funds, it’s wise to discuss your strategy with a financial advisor or tax professional, especially if you’re counting on short-term rental income to repay the balance.

Learn how a HELOC works with HomeEQ. 

How to qualify for a HELOC from your primary residence

HELOC eligibility is based on the value of your primary residence, your creditworthiness, and your ability to repay. You typically need:

• At least 15%–20% equity in your primary home
• A credit score of 620 or higher (700+ preferred)
• A low debt-to-income (DTI) ratio
• Reliable income from employment, retirement, or investments

Lenders will ask for:

• Recent mortgage statements and property tax info
• Proof of income (W-2s, 1099s, or pension statements)
• Credit history and ID verification

Once approved, you’ll receive access to a line of credit you can use at any time during the draw period, either by writing checks, transferring funds online, or using a dedicated HELOC card.

HomeEQ’s digital platform makes this process even easier, offering soft credit checks and instant eligibility assessments with no paperwork.

FAQ: Home equity for vacation home renovations

Can I use the HELOC if the second home is a rental?

Yes. Many homeowners use HELOCs to update properties listed on Airbnb or Vrbo. Just ensure the rental aligns with local zoning and lender guidelines.

Are there limits on the renovation types?

No. Unlike FHA or government-backed rehab loans, HELOCs don’t restrict how funds are used, as long as the loan remains in good standing.

Will lenders ask about the second home’s condition?

No. Since the HELOC is secured by your primary home, lenders generally do not assess the condition of the second property.

What happens if I sell one of the homes?

If you sell your primary home, the HELOC must be paid off at closing. If you sell the vacation property, you may continue using the HELOC (unless your financial profile changes significantly).

Can I deduct any of the renovation costs?

Possibly. Interest on the HELOC is only deductible if the funds are used to substantially improve the home securing the loan. In this case, vacation property renovations would not typically qualify.

Connect with HomeEQ for fast renovation funds in a few days

A HELOC from your primary residence can be a strategic way to breathe new life into your vacation home, without selling investments or taking out expensive personal loans. 

With proper planning, you can transform your getaway while preserving your financial flexibility.

Check your HELOC eligibility in just minutes and discover how much your renovation budget might be.