Yes - the home must qualify as a home. Banks look for a couple of things for an equity line of credit. One is equity. Do you owe less than the home is worth. Let's say the home is worth (in the market place not what you think) $100,000 and you owe $50,000 - that leaves $50,000 for a line of credit - on which a bank would loan up to 80%.
Banks also want to make sure that you can make the payments - now, not after you get the funding. So, with the above example - if the loan payment is $400 per month - they want to make sure that you have free cash flow that equals at least $400 per month.
But, the first thing a bank will look at, regardless of everything else is your personal credit. If your credit score is low, they will decline you loan right away and not waste time or effort on it.
Other then that, it must be located in a residential or mixed zone and be classified (usually on the tax rolls) as a single family home.
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