The Struggle to Access Home Equity: How to get a HELOC During COVID-19

COVID-19 has drastically changed our lives in many ways — from jobs to finances — and now it’s impacting how to get a HELOC. 

If you’re a homeowner looking for emergency funding, debt consolidation, or cash for home improvements, a home equity line of credit, or HELOC, may be a great option. But the opportunity to borrow against your equity may not last long as more banks and lenders are halting applications or changing qualifications due to the coronavirus pandemic.

We’ll look at why COVID-19 is impacting your access to a home equity line of credit and how to get a HELOC despite the pandemic.

COVID-19’s Impact on HELOCs

COVID-19 has caused banks and lenders to tighten standards for HELOCs. Wells Fargo and JPMorgan Chase have halted HELOC applications altogether, while Bank of America increased its HELOC credit score requirement from 660 to 720. Financial institutions are nervous about lending to homeowners because of the high unemployment rate and job market uncertainty.

Since May 2020, several banks, including Wells Fargo and Chase have stopped accepting applications for HELOCs. Other lenders and lending platforms, like Prosper are still offering HELOCs. But because no one knows what next week or month will bring, now may be the best time to apply for a home equity line of credit while it’s still an option. 

How to Get a HELOC

The first step in how to get a HELOC during COVID-19 is researching what you need to apply, which depends on the lender. Typically, it’s similar to applying for a traditional mortgage and, in some cases, the application process can be done online. Information you may need to provide in your application includes:

  • Personal information (name, phone, email, social security number)
  • A minimum of two years of residence history and documentation
  • Employment and income history, including your most recent pay stubs and W2
  • Your latest bank statements and investment accounts  
  • Financial records for your owned property

Like any loan or credit line you apply for, it’s important to shop around to find the best fit for your needs. In addition to finding the best rates and lowest fees, you’ll also want to ask about closing costs, financial flexibility and fixed-rate options for your HELOC.

Closing costs

Before applying, ask about any closing costs. Many times these fees can be paid in cash at closing or they can be added to your HELOC balance. If you do add to your HELOC balance, you’ll have to start paying on it within 30 days of closing, even if you don’t draw any money for other uses. Sometimes HELOC closing costs are waived, but there are usually conditions you have to meet. Be sure to ask your lender about those conditions.


You’ll want to find out how flexible the HELOC is before applying. Ask about interest-only payments and the ability to pay everything off early, as some lenders can charge you for doing so.

Fixed-rate option

While many HELOC rates are variable, some lenders offer a fixed-rate option. Fixed-rate options allow you stability and peace-of-mind when it comes to the risk of rising interest rates. If you can lock in a lower rate when applying for a HELOC, a fixed option may be a good choice.

Access Your Home Equity

Now that you know more about how to get a HELOC during COVID-19, it’s important to make sure you have enough equity to apply. If you want to find out how much you may be able to get from a home equity line of credit, use a HELOC calculator.

Read More: What is a HELOC and How Does It Work?