The consultation follows a government review of arrears and repossession policies and practices in the second charge sector.
The OFT says the review did find examples of good practice within the market but, as with other lending markets, there is scope for spreading good practice more widely.
The draft guidance covers a range of issues such as customer care, advertising and selling techniques, contractual terms and conditions, and practices around managing arrears or defaults.
It sets out the standards of behaviour that the OFT expects from those businesses engaged in second charge lending and is designed to complement existing OFT guidance for lenders.
Responses to the consultation on this guidance will also be taken into account as part of the wider irresponsible lending project being undertaken by the OFT.
The deadline for responding to the consultation is 8 May.