Better.com on Monday introduced a bank‑statement HELOC designed to let self‑employed consumers use their checking and savings deposits as the primary proof of income to borrow against home equity. The product, the company says, will streamline underwriting for clients who lack traditional payroll documentation, a cohort that industry estimates places roughly 10 percent to 12 percent of the workforce — millions of households — outside standard mortgage channels.

“This is about aligning lending with modern work,” a Better.com spokesperson said. “Many entrepreneurs and freelancers have steady cash flow but not W‑2s; bank‑statement underwriting lets us evaluate that cash flow consistently and digitally.” The lender says the program integrates automated deposit analysis and a full digital application intended to cut processing times below legacy HELOC timelines.

Economists and mortgage specialists say the offering targets a persistent mismatch in the housing finance system. Home equity nationally sits near record levels, giving many households large collateral cushions even as incomes become more variable. Federal Reserve data and private estimates in recent years have pointed to tens of trillions of dollars of homeowner equity nationwide, while outstanding HELOC balances remain a modest share of that total — a gap that fintech lenders have been attempting to narrow.

Market implications could be significant. By opening HELOC eligibility to borrowers with nontraditional income, Better.com and competitors may expand the addressable market for home‑equity lending, boosting originations at a time when traditional banks have pulled back from riskier underwriting. That could support consumer spending for self‑employed households who often face lumpy income streams and limited access to unsecured credit.

But the product also raises policy and risk questions. HELOCs are typically variable‑rate instruments tied to prime or other indices; in a higher‑for‑longer interest‑rate environment, households that tap equity to smooth income could face rising repayment costs. Regulators have, since the 2008 financial crisis, sharpened focus on nonstandard underwriting and consumer disclosures. The Consumer Financial Protection Bureau has recently signaled increased attention to digital underwriting practices, and analysts say any surge in bank‑statement HELOCs will be watched closely for borrower outcomes.

“Using deposits for income verification is not new, but scaling it to HELOCs requires careful stress testing,” said a housing finance analyst. “Lenders need to ensure they’re not amplifying repayment risk in an environment where rates remain volatile and gig‑economy incomes can be cyclical.”

Longer term, the move reflects structural labor‑market shifts: the rise of independent contractors, platform workers and entrepreneurs has steadily increased demand for credit products that do not rely on payroll documentation. If such HELOCs gain traction, they could alter borrower behavior, turning home equity into a more accessible buffer for everyday income smoothing and small‑business financing.

For policymakers, the balance will be between expanding access and preventing a repeat of past credit excesses. For now, Better.com’s offering is likely to be a test case: a digital product positioned to tap home equity that is plentiful on balance sheets but unevenly available to those working outside traditional employment structures.