Yes, you may offer a HELOC on non-owner-occupied rental property. We are not aware of any law or regulation that would prevent it. The Illinois Financial Services Development Act, which applies to any revolving credit plan where the borrower is a natural person, expressly permits a financial institution to secure the loan with real property. In addition, neither Regulation X nor Regulation Z apply to the loan, because both regulations deem credit that is extended to improve non-owner-occupied rental property to be for a business purpose.

For resources related to our guidance, please see:

• Illinois Financial Services Development Act, 205 ILCS 675/4 (“Notwithstanding the provisions of any other laws in connection with revolving credit plans, any financial institution may, subject to the other provisions of this Section 4 offer and extend credit under a revolving credit plan to a borrower and in connection therewith may charge and collect interest and other charges, may take real and personal property as security therefor . . . .”)

• Regulation Z, Official Interpretations, 12 CFR 1026, Paragraph 3(a), Comment 4 (“Credit extended to acquire, improve, or maintain rental property (regardless of the number of housing units) that is not owner-occupied is deemed to be for business purposes.”)

• Regulation X, 12 CFR 1024.5(b)(2) (“Persons may rely on Regulation Z in determining whether the exemption [for business-purpose loans] applies.”)