The Quick Read: In Texas, state law decides whether your refinance counts as a cash-out loan, not the label a lender puts on it. The loan, plus every other lien on the home, must fit under 80% of the home’s agreed value. Texas also adds a pre-closing wait, a closing-location rule and a fee limit. Program details are subject to lender guidelines and full file review, and nothing here is a commitment to lend.
Key Takeaways
- A cash-out refinance on a Texas primary home tops out at 80% of the home’s value, counting all liens.
- Your lender must treat the loan under Texas homestead rules even if the loan program calls it something milder.
- A waiting period runs before closing, and a federal cancellation window runs after.
- Closing happens at a lender, attorney or title company office, with all owners and spouses consenting.
- A refinance that takes out no extra cash is usually a different, simpler loan.
What Makes a Texas Cash-Out Different?
A cash-out refinance replaces your current first mortgage with a larger one and hands you the difference. In most states, the loan program sets the rules. In Texas, the state sets them first, and the loan program follows.
Texas Cash-out refinance estimate
The starting figures are an example value with a balance and a cash request in proportion. Replace them with yours.
Editable benchmark: 7.32% as of October 22, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a cash-out refinance quote.
Illustrative starting assumptions: a $285,000 home value, a $157,000 current balance, the agency cap on a one-unit principal residence, a thirty-year term at the current Freddie Mac benchmark, and property taxes and insurance estimated at typical rates for Texas. Every field is editable.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a cash-out refinance quote; a cash-out loan is priced by the lender at lock. The cash available is the loan the program cap allows less the balances paid off, before closing costs, which are not included. The HELOC line is the program’s combined loan-to-value ceiling applied to the same value and balance. Taxes and insurance are editable estimates. Licensed in sixteen states for consumer mortgages. On a Texas homestead the state constitution caps a cash-out refinance at the agency figure and adds a waiting period, a prescribed closing location, and a fee cap; the wholesale lane above the agency cap is not available on a Texas homestead.
Texas homestead protection is old and strong. It limits how a lender can take equity out of your home, and it shapes the loan from the first disclosure to the day you sign. Texas lenders call these loans “A6” loans, after the subsection that governs them. We cover that subsection below.
Across the wholesale programs Lendmire places consumer files with, the Texas homestead overlay is the first thing that gets checked on a cash-out. Lendmire is a mortgage broker, not a lender. It arranges these loans through wholesale lenders, and lenders make the credit decisions. If you want to see how the general program works before the Texas layer, start with Lendmire’s cash-out refinance programs page.
One more Texas fact. A conventional cash-out on a one-unit primary home generally caps at 80% leverage. One wholesale lane reaches 89.99% with no mortgage insurance in other states, but it is not written in Texas. On a Texas homestead, the state cap sits at that same 80% agency figure, so the lane does not apply.
Texas Cash-Out Requirements at a Glance
The table separates three layers: what state law requires, what loan programs add, and what individual lenders may layer on. Mixing them up is a common source of confusion.
| Requirement | What it means | Source layer |
|---|---|---|
| Loan-to-value cap | New loan plus all liens: 80% of value | State law and agency guides |
| Property | Your primary-residence homestead | State law |
| Waiting period | A set wait before closing, with a trigger | State law |
| Closing location | Lender, attorney or title company office | State law |
| First-mortgage age | At least 12 months old, note to note | Loan program |
| Time on title | Six months, with exceptions | Loan program |
| Credit and ratios | 620 decision score; total ratio up to 50% on most files | Loan program |
| Higher score floors | Some lenders set stricter minimums | Lender overlay |
Subject to lender guidelines, the program figures above describe the wholesale conventional lanes. Your file can land differently.
Does Your Home Qualify?
Only your primary-residence homestead qualifies for the Texas treatment. That is the property you live in and claim as your homestead. A second home or rental sits outside these rules, and occupancy decides the leverage there.
Three checks come up on almost every Texas file:
- Occupancy. The home must be where you live. Lenders look at the application, the title work and the homestead documents.
- Acreage. Texas limits how much land counts as the homestead. If your lot sits next to other land you own, the lender may ask for a survey showing the mortgaged homestead is a separate parcel.
- Property type. A manufactured home is a narrow exception. It is eligible only when Texas law classifies it as real property and it meets the program’s manufactured-home criteria. Some lenders set a lower leverage limit for these homes or decline them, so many manufactured homes will not work.
An eligible revocable trust can be the borrower if it counts as a qualifying trust under Texas law. The Fannie Mae Selling Guide on Texas Section 50(a)(6) loan eligibility covers the acreage, trust and manufactured-home points.
How Much Cash Can You Take?
You can take the gap between 80% of your home’s value and what you already owe against it, less closing costs. Two details trip people up. The test counts all liens of record, not just the first mortgage. And the value is the one you and the lender agree on in writing, supported by an appraisal.
Here is the math, in percentages only. Say your home appraises at 100% of its value, and you owe a first mortgage at 55% of that value plus a second lien at 5%.
| Step | Share of home value |
|---|---|
| Appraised value | 100% |
| Texas ceiling | 80% |
| Existing liens | 60% |
| Room before costs | 20% |
| Less closing costs financed | Reduces the 20% |
Your actual cash is that last figure after costs. A lender can show you the final number in your Loan Estimate. If a second lien stays in place, it counts against the same 80%, so it may need to be paid off in the transaction.
Notice what the cap means for you. A Texas homeowner keeps at least 20% equity after a cash-out. Programs that reach higher leverage elsewhere can’t do so here.
How the Loan Moves, Step by Step
Here is how a Texas cash-out gets underwritten, in order:
1. Homestead check. The lender confirms the home is your primary residence and within the acreage limit.
2. Application and disclosure. You apply and receive the required Texas consumer disclosure. The waiting-period clock depends on both events.
3. Appraisal. The appraisal supports the written statement of the home’s fair market value. That statement is signed by you and the lender, and the appraisal is attached to it.
4. Underwriting. The lender reviews credit, income, assets and the property. Automated findings are a starting point only. The Fannie Mae guide on Texas A6 loans says the automated system does not contain the Texas eligibility rules, so an “Eligible” finding does not mean the loan complies with Texas law.
5. The 80% test. The new loan plus other liens must fit under 80% of the agreed value.
6. Closing. You sign at a lender, attorney or title company office. Every owner and spouse must consent.
7. Cancellation window. The federal right to cancel applies to a refinance of your primary home. Funds are generally not disbursed until it passes.
8. First payment. It must be due no later than two months after closing, per the same Fannie Mae guide.
Fannie Mae also adds a use-of-proceeds point. Proceeds must not buy or improve the homestead when a loan for that purpose could be made under a different part of the Texas rules. If your cash is going into the house, tell your loan officer early.
The Two Clocks: Before and After Closing
Two waiting periods bracket the loan, and they run at different times for different reasons.
Before closing. The Texas Office of Consumer Credit Commissioner states that closing cannot happen until a 12-day period has run. It starts only after you have applied and received the required disclosure. Per the OCCC advisory bulletins, if you apply Monday but the disclosure reaches you Wednesday, the clock starts Wednesday. Many borrowers assume it starts at application. It does not.
After closing. Federal law gives you until midnight of the third business day to cancel a refinance of your principal dwelling. A purchase loan has no such right. The clock runs from the last of three events: closing, receipt of the Truth in Lending disclosure, and receipt of the cancellation notice. If a required notice or disclosure is missed, the right can stretch to three years.
Put together, these clocks mean no same-week funding. Plan the project that needs the cash around them.
Two older timing rules also matter:
- Seasoning. If a first mortgage is being paid off, the conventional programs want it to be at least 12 months old, counted note date to note date. A borrower also generally needs six months on title. Delayed financing and certain inheritance and legal-award cases are exceptions.
- Credit events. The agencies set waits after major events: four years from a chapter 7 discharge, seven from a foreclosure, and four from a short sale or deed in lieu. Shorter periods may apply with documented extenuating circumstances. These are agency rules, and lenders may set their own.
Where the General Rule Breaks
A few situations bend the usual picture. Most surprise borrowers who have read only a general guide.
“Limited cash-out” does not escape Texas law. The Fannie Mae and Freddie Mac loan labels, such as cash-out and limited cash-out, don’t decide whether Texas homestead rules apply. Fannie Mae tells lenders not to rely on its categories for that decision. The lender decides Texas compliance separately, then decides how to deliver the loan.
A rate-and-term refinance is usually a different loan. A refinance that pays off your first mortgage and closing costs, with only incidental cash back, is generally not a Texas A6 loan. Whether a given refinance falls on that side is a Texas-law question, so confirm the classification with your lender. On a one-unit primary home, conventional rate-and-term refinances reach 95% leverage, with mortgage insurance above 80%. Under the federal Homeowners Protection Act, you can request that insurance be cancelled at 80% of original value, and the servicer must end it automatically at 78%.
Existing A6 loans. If you already have a Texas home equity loan, a path exists to refinance it into an ordinary mortgage. The conditions reported include a waiting period, no new cash beyond costs, and the 80% limit. Read the required notice carefully before you sign anything, because taking cash out can change your options later.
Modifications. A home equity loan and a later modification are treated as one transaction for Texas rules, including the fee limit.
Curative refinances. If a loan did not comply with Texas rules, a refinance made to cure the problem can be sold to Fannie Mae. Without a cure, a loan is ineligible once a failure has been identified.
Second homes and rentals. The Texas homestead rules apply to your primary home. For anything else, occupancy decides the leverage: conventional cash-out on a second home or investment property is 75%.
Which Loan Types Work on a Texas Homestead?
Conventional loans are the main route. A conventional cash-out on a one-unit primary home takes 80% leverage, and two- to four-unit primary homes take 75%. Freddie Mac’s guide says the maximum for a Texas Equity Section 50(a)(6) mortgage must not exceed 80%, and it may be lower if the ordinary cash-out limits require it.
The government programs behave differently:
- FHA. FHA cash-out is capped below the purchase leverage, and it is rarely offered on a Texas homestead. FHA Streamline refinances, which need an existing FHA loan, involve no appraisal and limited credit review. They require a net tangible benefit and take out no cash. FHA rate-and-term refinances reach 97.75% with an appraisal.
- VA. The Texas Attorney General’s opinion KP-0183 addressed whether a VA cash-out fits within the 80% cap. It concluded that VA cash-out is precluded on a Texas homestead. A VA IRRRL, which takes out no cash, remains an option for an existing VA loan. It carries a 0.5% funding fee unless you are exempt, needs no VA appraisal and requires a net tangible benefit.
- Jumbo. Above the conforming limit, jumbo lanes take over. The Texas 80% cap still applies to a cash-out on the homestead.
Credit minimums matter too. Most conventional wholesale lanes start at a 620 decision score, and some lenders set a higher floor. The automated finding governs most files, with a total ratio ceiling of 50%. Manually underwritten loans use 36% or 45% ratios along with reserve and score factors.
Cash-Out vs. the Alternatives
Texas offers other ways to reach equity, and each has its own limits. A cash-out refinance replaces your whole mortgage, so it makes the most sense when your current loan has no advantage worth keeping. A home equity loan or line adds a second lien and leaves your first mortgage alone. Some lenders don’t permit lines of credit on a Texas homestead at all.
For a side-by-side look, Lendmire’s piece Texas Cash-Out Refinance vs Home Equity Loan: What Decides walks through what decides between them.
Here is a quick decision frame:
| If this describes you | The usual fit |
|---|---|
| Existing first mortgage is worth keeping | Second lien, if allowed |
| You want to replace the loan and take cash | Cash-out refinance |
| You want a different term, no extra cash | Rate-and-term refinance |
| You have an existing FHA or VA loan | Streamline or IRRRL |
Each option carries Texas homestead protections. Foreclosure on an A6 loan happens only by court order, and the loan carries no personal liability for you or your spouse absent actual fraud. Those protections are real, and they are part of why the rules are strict.
Why These Files Stall
Most delays come from a short list of problems:
- An appraisal below expectations. Lower value means a smaller 80% ceiling, and sometimes no cash at all.
- Liens nobody counted. A forgotten second lien or old judgment eats into the 80% room.
- A missed clock trigger. Borrowers count 12 days from application, but the clock starts at the later of application or disclosure.
- Homestead paperwork. Acreage, survey or trust questions can pause underwriting.
- A spouse who has not consented. Every owner and spouse must sign.
- The wrong loan label. Treating a cash-out as if it were a rate-and-term refinance causes compliance trouble later.
For documents, expect the usual: pay stubs or traditional personal-income documentation, bank statements, ID, proof of homeowners insurance, and mortgage statements for every lien. Self-employed borrowers should expect to show more income history. Your loan officer will give you a list tailored to your file.
Key Terms Defined
A6 loan: A Texas home equity loan or cash-out refinance made under the state’s homestead rules for equity borrowing.
Homestead: The home you live in and claim as your primary residence, which Texas law protects.
Lien: A legal claim on your home that secures a debt, such as a mortgage or home equity loan.
Fair market value acknowledgment: The written statement, signed by you and the lender, of what your home is worth, backed by an appraisal.
Seasoning: The age a loan or your ownership must reach before you can refinance it.
Right of rescission: Your federal right to cancel a refinance on your primary home within a short window after closing.
Frequently Asked Questions
Can I take out more than 80% of my Texas home’s value?
No. State law limits the aggregate principal to 80% of the home’s fair market value, and Texas regulators describe it as a limit on the loan amount, not a lender preference. Lenders cannot waive it. Programs that allow higher leverage in other states, including VA cash-out, do not change the Texas cap.
When does the 12-day wait start?
It starts at the later of two events: your application, or your receipt of the required consumer disclosure. If the disclosure arrives after you apply, the clock starts when you get it. Closing cannot happen before the period runs, so ask your lender for the disclosure on the day you apply.
Does a “limited cash-out” label mean the Texas rules don’t apply?
No. Texas law decides whether the loan is a homestead equity loan, regardless of how a loan program labels it. A refinance that takes no extra cash is generally treated differently, but your lender must make that determination under Texas law, not rely on the program’s category.
Can I get a VA or FHA cash-out on my Texas home?
VA cash-out is precluded on a Texas homestead under the Attorney General’s reading, and FHA cash-out is rarely offered there. If you have an existing VA or FHA loan, the VA IRRRL and FHA Streamline refinance the loan without cash. Both are subject to lender guidelines and full file review.
Do the same rules apply to my rental or second home?
No. The Texas homestead rules cover your primary residence only. On a second home or investment property, occupancy sets the leverage instead, and a conventional cash-out reaches 75%.
Weighing Your Options
If you are weighing a cash-out refinance against keeping the loan you have, Lendmire can help you compare the programs and the equity each one reaches. Because the Texas ceiling is fixed, the useful question is not how high you can go. It is whether the cash you can reach justifies replacing your current mortgage.
For your own numbers, request a scenario review with Lendmire.
For current guidelines and terms, see Lendmire’s refinance programs page.
About Lendmire
Lendmire, NMLS# 2371349, is a mortgage brokerage with consumer lending licenses in 16 states. FHA, VA, conventional and jumbo purchase and refinance loans are arranged through wholesale lending partners, and each application is reviewed individually by the lender. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. Fannie Mae Selling Guide B5-4.1-02: Texas Section 50(a)(6) Loan Eligibility
2. Fannie Mae Selling Guide B5-4.1-01: Texas Section 50(a)(6) Loans
3. Texas Office of Consumer Credit Commissioner: Advisory Bulletins
5. Texas Attorney General Opinion KP-0183
This article is part of Lendmire’s cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Can You Do a Cash-Out Refinance in Texas on a Primary Home? · Cash-Out Refinance Requirements for Debt Consolidation on a Primary Home · Is the Cash-Out Refinance Process Different on a Primary Home?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Important disclosures. Lendmire (NMLS# 2371349) is a licensed mortgage brokerage. Lendmire is not a direct lender, depository institution, or financial advisor. All loan inquiries are subject to lender underwriting; this article does not constitute a commitment to lend. Rates, terms, and program guidelines are subject to change without notice and vary by borrower profile, property type, and state. Information in this article is general in nature and is not financial, legal, or tax advice. Equal Housing Opportunity. NMLS Consumer Access: nmlsconsumeraccess.org.