A new Home Equity Gap Index suggests that billions of dollars in home equity remain largely untapped, creating an opportunity for Non-QM lenders offering alternative-documentation HELOCs to borrowers who may not qualify under traditional underwriting.
According to The Mortgage Reports' 2026 Home Equity Gap Index, U.S. homeowners hold an estimated $11 trillion in untapped home equity, even though 43.3% of mortgaged homes are considered equity-rich. The report highlights a significant gap between the amount of tappable equity available and the number of homeowners who actually access it through home equity lending.
For many self-employed borrowers, tapping that equity can be particularly challenging. Traditional underwriting often relies heavily on tax returns, where legitimate business deductions may reduce taxable income despite strong cash flow. At the same time, many homeowners remain reluctant to refinance first mortgages carrying interest rates near 3% or 4%.
That combination has created an opening for second-lien products that allow borrowers to access equity while keeping their existing mortgage in place.
California-based Truss Financial Group is among the lenders emphasizing that strategy. The company said its digital HELOC platform evaluates qualified borrowers using 12 to 24 months of bank statements rather than relying solely on personal tax returns, allowing eligible homeowners to access up to $750,000 in home equity without replacing their current first mortgage.
"Strong borrowers are often hidden by traditional paperwork," said Jeff Miller, founder and CEO of Truss Financial Group. "Modern lending must measure real financial strength, not just standard income documentation. We designed our equity options to respect the unique cash flows of entrepreneurs, turning stationary home equity into an active tool for business growth."
According to the company, its platform uses verified operational cash flow to evaluate borrowers and includes a digital application process with a soft credit pull, online verification, and mobile notarization.
While the Home Equity Gap Index focuses broadly on the disconnect between available equity and homeowner borrowing, the findings also underscore an opportunity for Non-QM lenders serving business owners, independent contractors, real estate investors, and other borrowers whose income may not fit conventional documentation standards.
The findings reinforce a trend that several Non-QM lenders have highlighted in recent weeks: homeowners with significant equity are increasingly seeking ways to access cash without replacing their historically low first mortgages.
As homeowners continue to hold onto historically low first-mortgage rates, alternative-documentation HELOCs are becoming an increasingly important option for originators looking to help clients access existing equity without refinancing.
