Short answer: yes. A HELOC that allows an active listing lets you draw your down payment from the home you're selling before it closes, so you can write a non-contingent offer on the next one. Approved applicants can have funds in as little as 5 days, the pre-qualification is a soft pull, and when the listed home sells the line is paid off at closing from the proceeds. The catch is that most banks won't do it once your home is on the MLS — you need a program written for listed homes.
This is the most common reason people look for a listed-home HELOC. They've found the next house. Their down payment is sitting in the current one as equity. And the seller of the next house has two offers on the table: theirs, with a home-sale contingency, and someone else's without one.
Why the contingency is what actually costs you
A home-sale contingency tells the seller, "I'll buy your house if mine sells first." From the seller's side that's an offer that might evaporate. Faced with a clean offer, most sellers take the clean one — often even when the contingent offer is higher. And if they do accept yours, you're negotiating everything else — repairs, closing date, price adjustments — from the weaker position.
The contingency also works against your own listing. Every week without a buyer on your current home is a week the next house might go to someone else, and that pressure is exactly what makes a lowball offer on your listing start to look acceptable.
Getting the down payment out first removes the contingency. You become a cash-position buyer on one side and an unhurried seller on the other. Same house, same equity, a completely different negotiating position.
How it works, step by step
- Check your number. The equity calculator gives a rough line size in thirty seconds. Pre-qualifying is a soft credit pull with no impact to your score.
- Apply online. The application is fully digital and can be completed from your phone. No branch visit.
- Fund. Approved applicants can have funds available in as little as 5 days. You draw the down payment amount; the rest of the line sits unused and costs nothing in interest.
- Write the offer. With cash in hand, your offer on the next home carries no home-sale contingency.
- Close the sale. When your listed home sells, the line is paid off at closing from the proceeds, on the settlement statement. Nothing carries over.
What it costs, and what it doesn't
A HELOC charges interest only on the amount you draw. If you pull $80,000 for a down payment against a $200,000 line, you pay interest on $80,000 — for the weeks or months until the old home closes. Compare that to a traditional bridge loan, which typically charges fees and interest on the full amount whether you use it or not, and takes two to six weeks to underwrite.
It does not replace or refinance your first mortgage. The line sits behind your existing loan in first, second, or third lien position, so the rate you have stays exactly where it is.
Specific rates and fees depend on your credit, your property, and your state, and we'll put them in front of you before you commit to anything. Every application is subject to credit approval, verified property value, and program guidelines.
The limits you should know before you plan around it
- Maximum line on a listed home: $400,000. Your actual line depends on your equity and the program's limits.
- Available in 26 states. Not available in Texas. If your property is outside the covered states, we'll say so up front.
- Timing. The practical window closes when you go into escrow with a buyer on your current home. If you're already under contract, call rather than apply — whether it makes sense depends on your closing date.
- Your new mortgage. The HELOC and any payment on it will show in your debt-to-income calculation on the purchase loan until it's paid off. Your purchase loan officer should model it. Usually the old home closes and the line is paid before or alongside the new purchase.
When this is the wrong tool
If your market is slow and the seller of the next home has no other offers, a contingency may cost you nothing and a HELOC is unnecessary. If you already have a buyer under contract with a near-term closing date, a rent-back or an extended close might get you there without a new lien. And if you'd rather not borrow against the house at all, a securities-backed line or a 401(k) loan can fund a down payment — with their own tradeoffs. More on the alternatives here: Bridge loan alternatives when you're selling your home.
Common questions
Will the lender on my new mortgage accept HELOC funds as a down payment?
Generally yes — funds drawn from a home equity line are a common, documented source of down payment. Your purchase lender will want to see the draw and will count the line in your debt-to-income until it's paid off. Confirm with your purchase loan officer early.
What if my home doesn't sell as fast as I expected?
You continue paying interest on the amount you drew until the home closes. That carrying cost is the main risk of any buy-before-you-sell approach, and it's worth modeling against a realistic days-on-market number for your area before you draw.
Can I draw only part of the line?
Yes. A HELOC is a revolving line. You draw what you need for the down payment and leave the rest untouched; interest applies only to the drawn balance.
Does checking my number affect my credit?
No. Pre-qualification uses a soft credit pull, which has no impact on your score.
My bank already said no because the house is listed. Does that matter?
Not for this program. A decline for an active listing is a guideline mismatch at that bank, not a credit event. See what to do after a bank declines you for a listed home.
Related guides
Run your actual numbers
The calculator gives you a rough line size. A short call gives you the real one, along with what it would cost for the weeks between funding and your closing — which is the number that actually decides whether this is worth doing.