It has been years since I have had to deal with HELOCs. If I recall correctly, it is required that the loan be set up to be a revolving line of credit for a certain number of years and then it must go to payments. I find, in the constitution, the requirements for payments during the draw period and repayment periods, but I cannot find where the constitution requires the line cease to be a line and go to amortizing equal monthly payments.

It is in the constitution Section 50(a)(6)(t)(8)

(8) repayment is to be made in regular periodic installments, not more often than every 14 days and not less often than monthly, beginning not later than two months from the date the extension of credit is established, and:

(A) during the period during which the owner may request advances, each installment equals or exceeds the amount of accrued interest; and

(B) after the period during which the owner may request advances, installments are substantially equal.

Thanks, Randy....yes, I had found that citation.....guess I was looking for something that says that bank must set up the HELOC with a draw period and a pay back period. This citation, to me, just says how to set up payments for a draw period and repayment period...not that there must be one. But.....if that's all that there is...guess that answers my question! Thanks!

Well, a balloon is not allowed. If you don't have a repayment period, how can the loan ever fully amortize? It is sort of one of those things you have to back into rather then reading it straight up and to the point.

Ah!....excellent explanation! Thanks!