The Quick Read: A Texas homestead cash-out sits under three layers of rules: the Texas Constitution, the program rulebook, and the lender’s own overlays. The strictest layer decides the outcome. On a conventional loan, Texas law caps total debt on the home at 80% of value and spaces equity loans at least 12 months apart. FHA cash-out also tops out at 80% on paper, but it is generally not offered on a Texas homestead in practice.
Texas FHA cash-out estimate
Seeded with an example value, a balance to match, and a round cash request; change any field.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not an FHA cash-out refinance quote.
Illustrative starting assumptions: a $285,000 home value, a $157,000 current balance, the FHA cap on a principal residence with the upfront premium financed, 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.
An illustration, not a Loan Estimate, an approval, a quote, or a commitment to lend. The rate shown is the weekly Freddie Mac thirty-year conventional benchmark, used as a market reference; an FHA cash-out is priced by the lender at lock, and this is not an FHA cash-out refinance quote. HUD’s cap limits the base loan; the upfront premium is financed inside the Texas homestead cap; the monthly premium for the first year follows the snapshot’s schedule. Cash available means the base loan the cap permits less the balances retired, before closing costs, which this calculator leaves out. The line figure applies the line program’s combined loan-to-value ceiling to the same value and balance. Taxes and insurance are estimates you can edit. Licensed in sixteen states for consumer mortgages. On a Texas homestead the state constitution caps the whole loan, financed premium included, at the FHA figure and adds a waiting period, a prescribed closing location, and a fee cap.
What Makes a Texas Homestead Cash-Out Different?
A Texas homestead cash-out is treated as a home equity loan under state law, so Texas rules apply on top of whatever the loan program requires. The label comes from the Texas Constitution, not from the lender.
Texas homes carry unusual protection. Article XVI, Section 50 of the Texas Constitution shields a homestead from forced sale for most debts, with listed exceptions. A lien on the home is valid only if it secures a debt the section describes. The same section holds the home equity lending provisions, as the Texas A&M Real Estate Research Center explains. Lenders call a cash-out under it an “A6” loan, after Section 50(a)(6).
Here is the practical effect. Texas law decides whether your loan counts as cash-out, not the lender’s label. Take cash at closing, or pay off a non-purchase second lien, and the loan is typically an A6. A home owned free and clear also counts as cash-out under Fannie Mae’s cash-out rules.
Key Terms Defined
Cap: The most total debt a lender may place on the home, stated as a percentage of appraised value.
Seasoning: A required waiting period, such as time on title or the age of the loan you are paying off.
Note date: The date you signed the existing mortgage note, which is how the age of a loan is counted.
A6 loan: A Texas home equity loan made under Section 50(a)(6) of the state constitution.
Combined loan-to-value (CLTV): All liens on the home added together, divided by its appraised value.
Adjusted value: The value figure FHA uses to set the cap on a loan.
How Do the Caps Work?
The cap is a ceiling on total debt, and every lien you leave in place uses up room under it. The new loan must cover the payoff, closing costs and any financed fees. Whatever remains is your cash.
The arithmetic is simple. Multiply appraised value by the cap. Subtract the balance of every lien that stays. That is the most new debt allowed. A borrower already close to the cap may have little cash to take.
Here is how the caps line up.
| Rule | Conventional | FHA cash-out |
|---|---|---|
| Cap, one-unit primary home | 80% | 80% of adjusted value |
| Cap, two to four units | 75% | Varies by lender |
| Texas A6 cap | 80%, no exceptions | Same state limit |
| Binding rule | Lower of Texas or program cap | Lower of Texas or program cap |
Fannie Mae’s Eligibility Matrix sets principal-residence cash-out at 80% for one unit and 75% for two to four units. HUD cut FHA’s cash-out cap from 85% to 80% for case numbers assigned on or after September 1, 2019, aligning it with the conventional market, per HUD’s announcement. The Handbook was updated to match, as the HUD Handbook 4000.1 transmittal records. Final terms depend on lender guidelines, property type, leverage, and the borrower’s complete credit picture.
A common myth says FHA still lets you borrow 85%. It does not. Another says a HELOC or second lien adds room above the cap. It does the opposite: it consumes room.
What Is Seasoning, and Which Clocks Apply?
Seasoning is not one rule. Several separate clocks run at once, and each is counted differently. Miscounting one can stall a Texas cash-out.
Title clock (conventional). Fannie Mae wants at least one borrower on title for six months before the new loan’s disbursement date. Exceptions exist for inheritance, divorce awards, legal awards and the delayed-financing path for a cash purchase.
Loan-age clock (conventional). Any existing first mortgage you are paying off must be at least 12 months old, counted from note date to note date. Six months on title does not satisfy this. Fannie Mae made the change in announcement SEL-2023-01.
Texas spacing clock. Texas allows one A6 closing per homestead in any 12-month period. Texas itself imposes no wait between buying the home and closing an equity loan, provided the other Texas requirements are met. That is why the state clock and the agency clocks can disagree.
FHA occupancy clock. FHA cash-out requires the home to be owned and occupied as your principal residence for 12 months before the case number. Across the wholesale programs Lendmire works with, that 12-month window is the gate. A lender typically checks it with employment records or utility bills. An inherited home carries no minimum occupancy period, unless you rent it out after inheriting.
Here is the scenario view.
| Your situation | Clocks that matter | Cash-out now? |
|---|---|---|
| Bought the home recently | Title and loan age; FHA 12-month occupancy | Often not yet |
| Refinanced your first mortgage recently | Loan age, note to note | Wait until the note is old enough |
| Already have a Texas equity loan | 12-month spacing; “once A6” designation | Not within 12 months |
| Have an equity second lien | Counts toward the cap | Depends on remaining room |
| Inherited the home | Title exception; FHA occupancy exception | Often allowed sooner |
Does FHA Cash-Out Work on a Texas Homestead?
Generally, no. FHA cash-out on a Texas homestead is not offered in the market, though HUD has not written a rule saying so. The reason is fee math.
Texas caps lender fees on an A6 loan at 2% of the loan, and FHA adds its own mortgage insurance. Commentary from mortgage-law practitioners concludes the two do not fit together without a large lender credit. So the FHA 80% figure exists in HUD’s rulebook, but a Texas homestead borrower rarely finds a lender who can use it. Some websites claim otherwise. Treat them with caution and ask a lender for a written answer on your specific file.
FHA does matter in Texas in a different way. For borrowers with an existing A6 loan, a no-cash refinance into a regular loan can be FHA-insured. More on that next.
Once an A6, Always an A6?
Mostly yes. Any refinance that pays off an A6 loan is treated as an A6 loan again, unless an exception applies. The exit path is the Section 50(a)(4) rate-and-term refinance.
To qualify, the borrower generally needs these four things:
- At least one year since the equity loan closed.
- No additional cash taken out.
- A combined loan-to-value below the cap.
- The required Texas notice.
Freddie Mac’s Guide Section 4301.7 allows 50(a)(4) loans that pay off an A6 and meet all Texas requirements as no-cash-out refinances. FHA fits here too. FHA’s own rate-and-term refinance can reach 97.75% on a principal residence occupied for the previous 12 months, but a Texas payoff of an A6 has to respect the state’s combined cap, so the lower figure governs. Whether the 80% combined limit leaves enough room is the real question.
What Does the Timeline Look Like?
Texas puts two fixed waits on the schedule, and neither can be pulled forward.
1. Application and appraisal. The appraisal sets value, and value times the cap sets your ceiling. Texas also calls for a signed acknowledgment of fair market value with the appraisal attached.
2. The 12-day notice. The lender must deliver the “Notice Concerning Extensions of Credit.” The 12 days run from the later of your application or the notice, per secondary sources, so confirm the exact mechanics with your lender.
3. Underwriting. Credit, income, debt-to-income and payment history all matter. Fannie Mae requires six months of reserves on automated-underwriting files with debt-to-income above 45%.
4. Closing. It must happen at a lender’s office, an attorney’s office or a title company. Every owner and spouse signs.
5. Cancellation window. After closing, a three-business-day right to cancel applies, and funds are released after it ends.
Plan your date around these. The wait is part of the loan, not a delay in it.
Where Does the General Rule Break?
Several edge cases change the answer:
- Rentals and second homes. A homestead is your primary home. An investment property is not one, so the Texas A6 limits do not apply, and ordinary program rules govern. For a home you live in, occupancy decides the leverage.
- Unit count. Fannie Mae’s cap drops to 75% on two to four units, and secondary sources say Texas A6 is limited to a one-unit primary residence.
- Agricultural homesteads. Eligible since the 2017 amendment.
- Fannie Mae’s high-LTV refinance option. It does not allow an A6 loan.
- Temporary buydowns. Fannie Mae has treated loans with a temporary buydown as ineligible for cash-out. Check the current guide.
- Freddie Mac loan types. A Texas A6 loan must be a first-lien fixed-rate loan or one of the 3/6, 5/6, 7/6 or 10/6 adjustable products, and it cannot be a special-purpose cash-out refinance.
How Should You Decide?
For most Texas homestead owners, conventional is the realistic cash-out lane, and the real decision is whether to take cash out at all.
A cash-out refinance replaces your original mortgage, whereas home equity loans and HELOCs leave it in place, per the CFPB research blog. If your current first mortgage is one you want to keep, a second-lien equity loan may fit better. The CFPB also notes that a cash-out refinance may stretch the payoff and raise the monthly payment because the new loan is larger.
Work through these steps:
1. Confirm how long you have been on title and how old your first mortgage is.
2. Check whether you already hold an equity loan or equity second.
3. Estimate room under the 80% cap after every lien you keep.
4. Decide what the cash is for. Using mortgage debt to pay other debts can raise foreclosure risk, per the CFPB.
5. Ask for a written answer on whether FHA is available on your file.
Common mistakes include assuming outright ownership exempts you, stacking a new line on a recent equity loan, and counting the clock from the application date. Texas A6 loans are non-recourse, absent fraud, but your home is still the collateral. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Across the wholesale programs Lendmire works with, the FHA cash-out cap is 80% of value on a home owned and occupied for 12 months. See the FHA cash-out refinance program for how that works outside Texas homestead rules. Every figure here is subject to lender guidelines and full file review, and none of it is a commitment to lend.
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.
Frequently Asked Questions
What is the most cash I can take from a Texas homestead?
Total debt on the home, counting every lien that stays, cannot pass 80% of appraised value. Multiply value by 80%, subtract your remaining liens, and then subtract payoff costs and financed fees. What is left is your cash. Credit, income and debt-to-income still decide approval.
How soon can I do a second Texas equity loan?
Not right away. Texas allows only one A6 closing per homestead in any 12-month period, and that spacing is counted from the first equity loan’s closing. Stacking a new line on a recent equity loan is a common way to run into this wall.
Does six months of seasoning cover everything on a conventional loan?
No. Six months on title is one clock. Fannie Mae also requires the first mortgage you are paying off to be at least 12 months old, counted note date to note date. Texas adds its own 12-month spacing between equity loans.
Can I refinance out of a Texas equity loan?
Yes, through a no-cash-out refinance under the Section 50(a)(4) exception. It generally needs one year since the equity loan closed, no additional cash, a combined loan-to-value under the cap, and the required notice. Without meeting those, the new loan is treated as an A6 again.
Does owning my home outright avoid these rules?
No. A home with no mortgage still counts as cash-out under Fannie Mae when you borrow against it, and Texas caps still apply to a homestead.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker licensed for consumer lending in 16 states. Lendmire arranges FHA, VA, conventional and jumbo purchase and refinance loans through wholesale lenders; every file is underwritten by the lender under the applicable program guidelines. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For the program’s current guidelines, see FHA loan programs.
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References
1. Article XVI, Section 50 of the Texas Constitution
2. Texas A&M Real Estate Research Center
3. Fannie Mae Selling Guide B2-1.3-03
4. Fannie Mae Eligibility Matrix
5. HUD press release on the FHA cash-out loan-to-value reduction
6. HUD Handbook 4000.1 transmittal
7. Freddie Mac Guide Section 4301.7
8. CFPB research blog, cash-out 2013–2023
This article is part of Lendmire’s FHA Loan series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Can a Texas Homestead Move From FHA to Conventional Cash-Out Refinance? · Is an FHA Cash-Out Easier to Get on a Texas Homestead? · How Much Payment an FHA Cash-Out Frees on a Texas Homestead
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.