> ## Documentation Index
> Fetch the complete documentation index at: https://docs.myfundingmachine.com/llms.txt
> Use this file to discover all available pages before exploring further.

# 0011 two stage heloc screen

# Two-stage HELOC screen and assisted fulfillment

Status: accepted

Date: 2026-08-24

## Decision

1. HELOC launches only as an assisted-booking product with the 7 Figures
   fulfillment team. There is no direct-apply link or Figure API integration.
2. Eligibility has two stages:
   * a read-only HELOC Prescreen derived automatically from credit and
     application data
   * an Eligibility Confirmation form whose stored verdict is definitive
3. The prescreen's only hard decline is FICO below 640. Missing mortgage,
   state, and DTI failures are soft because a paid-off home, another property,
   or verified business income can change the answer.
4. Definitive FICO floors are 640 for a primary residence and 680 for a
   non-primary residence.
5. Definitive DTI is capped at 45% and uses:
   `monthly credit-report debts ÷ (verified personal monthly income +
   25% × average monthly business income × (business ownership percentage / 100))`.
6. Equity uses 85% CLTV for primary and 70% for non-primary:
   `CLTV × estimated home value − mortgage and lien balances`. It must produce
   at least $25,000, or $35,000 in Texas.
7. The Figure SMB state matrix dated 2026-05-12 remains authoritative.
   California stays disabled.
8. HELOC funding is excluded from MFM's 15% processing-fee basis and team
   attribution.
9. All HELOC launch surfaces are gated by the location-scoped, visible,
   default-off Labs feature `heloc-for-business`.

## Context

Credit reports and application answers are useful screening signals but cannot
attest every property, paid-off mortgage, lien, or verified source of income.
Treating those signals as a final decision would incorrectly reject Applicants.
Conversely, waiting for a long manual form before showing any guidance would
hide a valuable early signal from Operators.

The underwriting sheet dated 2026-08-24 supersedes the Ty guide's conflicting
50% DTI and Figure's lower primary-residence FICO floor. The Figure SMB guide's
2026-05-12 state matrix and the Ty guide's 2026-07-23 fee treatment remain in
force.

## Considered options

* One automatic decision from credit/application data — rejected because the
  available inputs cannot establish definitive property and income facts.
* A manual form with no prescreen — rejected because it removes useful early
  guidance and increases Operator work on obvious hard declines.
* Direct Figure application or API fulfillment — deferred; assisted booking is
  the approved launch scope.

## Consequences

* Product selection must fail closed unless Labs is enabled and the latest
  location/contact Eligibility Confirmation is Eligible.
* Soft prescreen copy must explain the reversible nuance and route to
  confirmation; it must not imply lender approval.
* Estimated HELOC values remain Operator-facing.
* The fulfillment queue is separate from the Processor queue and appears only
  after plan confirmation and call scheduling.
* RentCast/home-value automation and Figure API integration remain future
  decisions.

The canonical implementation spec is
[`docs/plans/heloc-process.md`](../plans/heloc-process.md).

## Revision — 2026-09-08

The Operator requested visible preliminary results and reasons on the product
card, ownership-adjusted business income, and stale-confirmation checks.
The automatic pass is labeled `Potentially eligible`; only a current eligible
confirmation unlocks selection. Existing confirmations using business income
without an ownership percentage require that missing answer before reuse.


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