How Much Can You Borrow on an Investment Property HELOC in Texas Without Refinancing?

The Quick Read: On a Texas rental, the line tops out at 70% combined loan-to-value (CLTV) across the lenders in Lendmire’s network, minus every lien already on the property, with a maximum line of $500,000 and a 700 minimum credit score. The Texas 80% homestead cap does not govern a rental, so the lender’s own guidelines set the ceiling.

• Maximum line: $500,000, with a $25,000 minimum.
• Ceiling: 70% CLTV on an investment property; scores of 700 and 720 both reach it.
• Your first mortgage stays in place; the line sits beside it.
• Title must be in your personal name or a revocable living trust, not an LLC.
• Everything is subject to lender guidelines and full file review.

Why Texas Is Where This Question Gets Confused

Texas is the state where this confusion is loudest. The constitution’s home equity rules are strict, so many people assume they follow a rental property too. They don’t.

Under Article XVI, Section 50(a)(6), a home equity loan plus all other debt against the home cannot exceed 80% of its fair market value, according to the Texas A&M Real Estate Research Center. The loan also cannot be secured by any property other than the homestead. Texas Attorney General Opinion JC-0357 describes Section 50 as protecting the homestead from liens other than the ones the constitution lists.

A rental is not a homestead. So the 80% cap, the one-lien-at-a-time rule, and the 12-day waiting period are homestead rules. They bind a loan secured by your own home. A line secured by a rental follows the lender’s investment-property guidelines instead.

Texas Law vs. Lender Guidelines

The 12-day notice rule sits in Section 50(g) and applies to (a)(6) loans. A rental line has no such wait. That matters if you are trying to line up cash against a tight purchase contract.

How Much Can You Actually Borrow?

The formula is simple. Maximum line = (70% × property value) − all existing liens.

Lenders run CLTV on the full line limit, not the amount you draw. A line you never touch still counts against your leverage.

Three scenarios, using percentages only:

• Paid-off rental. There is no first lien to subtract, so the full 70% allowance is available, up to the $500,000 line cap.
• First mortgage at 50% of value. A 70% cap leaves room for a line worth about 20% of value.
• First mortgage at 65% of value. Only about 5% of value remains. On a modest property that may fall below the $25,000 minimum line, and then the line is not available.

For investors, a higher credit score adds eligibility, not leverage. Investment properties follow a two-tier table in which 720 and 700 both reach 70% CLTV, and 700 is a hard floor with no tier beneath it.

A short note on valuation. Because an investment line cannot exceed $500,000, it sits in the automated valuation lane and commonly closes with no traditional appraisal. A higher CLTV may call for a second valuation, and you can request a full appraisal in any case.

What the Lender Looks For

An investment-property HELOC is a personal-qualification product. Credit, debt-to-income, and documented income decide the file. Rental income affects your DTI, but it does not set the line size.

Across the lenders in the network, the typical requirements are:

• Credit: 700 minimum on an investment property, with the report no more than 90 days old at closing.
• DTI: 50% at most, tested on the interest-only payment at the maximum draw. A ratio above 45% needs a 680 score, which an investment file already clears.
• Property: single-family, 2-4 units, PUD, townhome, or condo, including non-warrantable condos. Manufactured homes, condotels, log homes, commercial, mixed-use, and agricultural zoning are not eligible.
• Texas specifics: a property is limited to 10 acres, and a property listed for sale, or listed within the past 60 days, is ineligible.
• Exposure: up to three lines per borrower, and a borrower with more than 15 financed properties is not eligible.
• Seasoning: a rental bought or refinanced within the last 6 months generally cannot take the line.

Qualification stays subject to lender guidelines and full file review. Nothing here is a commitment to lend.

How the Line Is Structured

An investment line is a standalone line in first or second lien position. That is what lets you keep your first mortgage. You are not replacing it, only adding a lien behind it.

Investment lines run a 5-year interest-only draw followed by a 25-year fully amortizing repayment. At least 75% of the line is drawn at closing, and pricing floats through both periods without converting to fixed. After closing, the minimum subsequent draw in Texas is $4,000.

The Title Trap: LLC-Owned Rentals

Title is the sharpest structural limit. Fee simple or leasehold must be held by you personally or by an inter vivos revocable living trust. LLCs, corporations, partnerships, and irrevocable, blind, or land trusts cannot hold title.

If your rental sits in an LLC, you have two choices. You can change the vesting, which may carry its own costs and lender-consent issues on any existing mortgage. Or you can use a DSCR cash-out refinance, which accepts entity ownership subject to lender program eligibility. Lendmire’s comparison of an investment property HELOC and a DSCR cash-out refinance in Texas walks through that decision.

What If You Need More Than the Line Gives You?

The HELOC ceiling is lower than the cash-out ceiling. An investment line caps at 70% CLTV and $500,000. A DSCR cash-out refinance on a standard rental generally reaches about 75% LTV across the network, with loan sizes reaching up to $3,000,000 on standard programs and smaller balances available through select lenders. Short-term-rental collateral sits lower, around 70% on a cash-out.

The tradeoff runs both ways:

A cash-out refinance qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Most programs want a score around 660, with a 620 floor in parts of the network and 700+ unlocking the strongest leverage tiers. Cash-out files are commonly expected to show about 6 months of seasoning. Select lenders in the network also offer coverage below 1.00 with leverage and terms adjusted. The complete DSCR loans guide covers those programs in full.

The choice usually comes down to what you hold. If you carry a low-cost first mortgage you want to keep, the line protects it. If you want the larger check, hold title in an LLC, or want rent rather than your personal income to carry the file, the refinance fits better.

Common Mistakes

• Assuming Texas bans rental lines. It doesn’t. Many banks simply don’t offer the product, which is a different thing.
• Applying the 80% cap to a rental. That cap belongs to your homestead.
• Counting only what you draw. CLTV runs on the full line.
• Treating the line as buying power. A line creates cash you can use toward a down payment. The lender financing the purchase separately approves the purchase loan.
• Using your own home as collateral by accident. A line on a Texas homestead brings back the 80% cap, the 12-day wait, and the one-lien rule, and puts your residence behind the debt.

Key Terms Defined

CLTV (combined loan-to-value): the total of all loans secured by a property, divided by its value.

Lien position: the order in which lenders are repaid; a first lien is paid before a second.

Draw period: the stretch when you can borrow from the line, paying interest only.

Homestead: the home you live in, which Texas protects under Section 50.

If You’re Weighing a Line Against a Cash-Out Refinance

If you are weighing a home equity line against a cash-out refinance and want to see how the numbers work, Lendmire can help you compare HELOC options based on the property, the equity available, credit profile, combined leverage, and your goals. Call 828-256-2183 or request a quote at Lendmire’s quote page. Lendmire is a mortgage broker arranging financing through select lenders in its wholesale network across 41 markets, including Washington, D.C.

About Lendmire

Lendmire (NMLS# 2371349) is a mortgage broker. Home equity lines of credit — on a primary residence, a second home or an investment property — are arranged through wholesale lenders in Lendmire’s 16 full-service states, and every line is underwritten by the lender under its program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.

References

1. Texas A&M Real Estate Research Center — What to Know About Home Equity Loans in Texas

2. Texas Attorney General Opinion JC-0357

3. Texas Constitution Art. XVI §50