What the Texas constitution changes
- A 12-day waiting period. The loan cannot close until at least 12 days after you apply and receive the required Texas home-equity notice. The "as little as five days" that applies elsewhere does not apply here; plan on roughly three weeks from application to funding on a clean file.
- Where you sign. A Texas home-equity loan must close at the office of the lender, a title company or an attorney. There is no kitchen-table or fully remote signing. The application and bank connection are still electronic; the signing appointment is not.
- Only one at a time. A homestead may carry only one home-equity loan under Section 50(a)(6) at any time. If you already have a Texas home-equity loan or HELOC on the house, the new line would replace it at funding rather than sit behind it. A first mortgage used to buy the home is not a home-equity loan and stays in place.
- Once a year. A new home-equity loan cannot close within one year of the closing of a prior one on the same homestead.
- A cap on total home-secured debt. The constitution limits the combined amount of all liens on the homestead to a fixed share of its value. The calculator on this site applies the Texas limit when you select Texas.
- A cap on lender fees as a share of the loan amount, and a three-day right to cancel after closing — the latter is federal and applies everywhere.
- Homestead only, and not agricultural-use land. The property must be your Texas homestead. Land with an agricultural-use appraisal (other than for dairy) is excluded. Both spouses sign, because Texas is a community-property state and the homestead belongs to the marriage.
What does not change
The income review. Twelve months of deposits into the account that receives the business's revenue are the income, verified in about two minutes through a bank connection, with no tax returns, Schedule C, K-1s, P&L or CPA letter. For Texas that covers the oilfield service companies and royalty owners of the Permian and Eagle Ford, the owner-operators on I-10, I-35 and I-45, the builders and trades riding the growth of Austin, Dallas–Fort Worth, Houston and San Antonio, the real estate agents in all of them, and the practice owners whose S-corp pays a modest salary. Texas has no state income tax, which does not stop the federal return from being written to show as little as possible.
Other Texas specifics
- No mortgage recording tax. County clerk recording fees only.
- Gulf Coast property. On homes from Brownsville to Beaumont, windstorm coverage — including TWIA policies — is confirmed in force as part of the property review.
- HOAs and MUDs. Most suburban homes built since the 1990s sit in an association, and many in a municipal utility district whose debt is on the tax bill. Both are carrying costs the deposits need to cover, not liens to pay off.
- Valuation is strong across the four big metros; ranch and acreage property is thinner and more likely to need an appraiser.
Common questions
I already have a HELOC on my Texas house. Can this go behind it?
Generally not. Texas allows one home-equity loan on a homestead at a time, so the new line would pay off and replace the existing one at funding. A purchase first mortgage is different and stays in place.
Why can't I sign at home like a refinance elsewhere?
The Texas constitution requires a home-equity loan to close at the office of the lender, a title company or an attorney. The rest of the process is electronic.
Does the five-day funding apply in Texas?
No. The 12-day waiting period after application and notice means a clean Texas file runs about three weeks.
My land has an ag exemption. Does that matter?
Yes. Texas excludes agricultural-use land from home-equity lending (other than dairy). The homestead acreage without the ag designation is what a home-equity loan can attach to; ask before assuming either way.