The Quick Read: Yes. The Texas Constitution caps a cash-out loan on your homestead at 80% of the home’s fair market value, counting every loan secured by the home. Loan size does not change that. A jumbo loan faces that cap plus the lender’s own requirements, which can only be stricter.
Texas Jumbo cash-out estimate
Enter the value, the balance, and the cash wanted; choose the occupancy and the structure; the lanes, the payment, and the reserves follow.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a jumbo cash-out refinance quote.
Illustrative starting assumptions: a $2,000,000 home value in the jumbo range, a $1,000,000 current balance, a principal residence on a thirty-year fixed structure at the current Freddie Mac conforming 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 conforming benchmark, a market reference and not a jumbo cash-out refinance quote; a jumbo loan is priced by the lender at lock. The lanes shown are the wholesale cash-out lanes behind this page as of the snapshot date; the calculator reads each lane’s leverage, loan maximum by occupancy, cash-in-hand cap, and reserves as the lane table states them, and a Lendmire loan officer confirms the lane on the file. The cash available is the loan the lane allows less the balances paid off, before closing costs, which are not included; on most lanes a jumbo cash-out begins one dollar above the conforming limit for the county, and two lanes start at a stated dollar floor instead. The HELOC line is the line 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 eighty percent of value and adds a waiting period, a prescribed closing location, and a fee cap; the calculator applies the Texas cap to a principal residence.
Two Tests, Two Different Rule-Makers
Think of a Texas jumbo cash-out as a loan that has to pass two separate tests. Most borrowers assume there is one.
The first test is “jumbo.” A jumbo loan is any loan above the conforming limit for your county. FHFA sets those limits each year for loans Fannie Mae and Freddie Mac can buy. There is a baseline for most of the country and a higher ceiling in high-cost counties, set at 150 percent of the baseline. Cross the county line and your loan is a jumbo. That is the whole definition.
The second test is the Texas homestead rule. It is written into the state Constitution, not into any investor’s guidelines. A cash-out loan on a Texas homestead is allowed only because the Constitution lists it as an exception to the homestead’s protection from forced sale. The Texas Attorney General has described that exception as carrying many restrictions in keeping with the intent to protect the homestead.
The two tests do not talk to each other. Crossing the jumbo line does not loosen the constitutional cap. A bigger house does not either.
| Test | Who sets it | What it limits | Can a lender waive it? |
|---|---|---|---|
| Jumbo status | FHFA, by county | Which loans agencies can buy | Not applicable; it is a label |
| Homestead cap | Texas Constitution | Total debt against the home | No |
| Jumbo program rules | The lender | Credit, ratios, reserves, appraisals | Only within that lender’s guidelines |
How the 80% Cap Works on a High-Value Home
The Constitution says the new loan, added to the outstanding balances of all other debt secured by valid liens of record against the homestead, cannot exceed 80 percent of fair market value on the date the credit is extended. You can read the wording in the Texas Constitution’s Section 50 text.
Three pieces of that sentence matter.
It counts every lien. The cap is not just about the new loan. A home equity line, a second mortgage, or any other loan secured by the home counts toward the 80%.
Value is set on the day of the loan. The appraisal is the denominator. On a jumbo, a small shift in appraised value moves the ceiling by a lot of dollars. A lower appraisal shrinks your cash-out directly.
It is a percentage, not a dollar amount. An expensive home does not get a looser cap. It gets a bigger dollar number at the same 80%. That is why the cap feels tight to jumbo borrowers who have a large first mortgage.
The practical result: the 80% line usually binds before any jumbo program’s own limit does. Across the wholesale programs Lendmire places files with, the top jumbo lanes reach up to 90% leverage on some transactions. Cash-out runs at lower leverage than purchase, and several lanes stop at 80%. A Texas homestead cash-out cannot use leverage above 80% in any case. The program ceiling is a ceiling you will not reach on this loan.
A Jumbo-Scale Example, in Percentages
Think in percentages of value, since that is how the cap works. Say your home appraises at 100% of value. The cap sets the ceiling for the new loan at 80%.
Scenario one: a large first mortgage. Your current mortgage balance is 70% of value. The new loan can be as large as 80% of value. After paying off the old mortgage, only about 10% of value is left, before closing costs come out. For a home that is jumbo-sized, that can still be meaningful money. But it is far less than owners expect when they see the home’s value.
Scenario two: a small first mortgage. Your balance is 40% of value. The new loan can reach 80%. After the payoff, up to about 40% of value is available, minus costs. Whether that new loan is jumbo depends only on its size against the county limit.
Notice what the examples do. They show that a loan can be jumbo while the cash-out is small, and that a loan can be large with generous cash-out. The two facts are independent.
One more point on other liens. If you have a separate home equity line or second lien that stays in place, it counts against the 80% too. A balance paid off at closing is generally not counted as separate debt, according to Texas lenders who cite a court case on this. Have your closing attorney or title company confirm how your payoffs are treated before you plan around it.
What the Cap Does Not Do
The cap is narrow. It does not decide whether your loan is jumbo, and it does not set your credit or ratio requirements. It does not apply the same way to every transaction.
- A rate-and-term refinance is different. A later constitutional amendment created a path to refinance out of a Texas home equity loan into an ordinary loan, if conditions are met. The conditions include no cash out beyond closing costs, the 80% value limit, and notice with a waiting period. The Texas Legislature’s bill analysis describes the change.
- Other property is different. The cash-out structure is for the homestead. Off the homestead, a different set of rules applies.
- Some loan types are barred. An Attorney General opinion concluded the Constitution prohibits a VA cash-out refinance on a Texas homestead. That opinion is several years old, so confirm current status before relying on it. If you hold a VA loan, ask your loan officer.
If the home you want to tap is not your primary residence, occupancy decides the leverage, and the homestead rules above are the starting point to ask about.
The Other Constitutional Rules That Shape the Loan
The 80% cap is the headline. The rest of Section 50 shapes the process. These rules are why a Texas cash-out feels different from one in another state.
| Rule | What it means for you |
|---|---|
| Notice and waiting period | You get written notice at or near application. A set number of days must pass before closing. |
| Closing location | The loan must close at the office of the lender, an attorney, or a title company. |
| Owner and spouse consent | Owners and spouses must consent in writing. |
| Fee cap | The Constitution caps certain lender fees. |
| Texas-specific documents | Loan documents are Texas-specific, not standard forms. |
| Product type | Cash-out structures are limited to certain loan types. |
None of these rules can be traded away. Your lender and your closing agent must follow them. A broker’s job is to place the file with a lender and closing team that handle Texas homestead loans regularly. Not every jumbo investor does.
The Federal Right to Cancel Is a Separate Clock
Here is where borrowers mix things up. The Texas waiting period and the federal right to cancel are two different protections.
Because a cash-out refinance is secured by your home, federal rules give you a right to rescind. Under the federal rescission rule, the right runs until midnight of the third business day after closing, delivery of the notice, or delivery of the material disclosures, whichever comes last. The lender cannot release your loan proceeds until that period is over.
The Texas notice period happens before closing. The federal cancel period happens after. One does not replace the other. Together, they mean cash from a Texas homestead cash-out arrives later in the process than people expect, so plan your spending around that.
What the Jumbo Lender Adds on Top
Once the Constitution is satisfied, the jumbo program’s own rules apply. Across the wholesale jumbo programs Lendmire works with, here is the envelope:
- A 660 decision score on the headline lane.
- Leverage up to 90% on the highest-leverage lanes, with several stopping at 80%. On a Texas cash-out, the 80% cap controls regardless.
- Loans up to $5,000,000 on the largest lanes.
- A 50% ratio ceiling on the fixed lanes, with 45% on the adjustable lanes and 43% on the interest-only lanes.
- Reserves measured in months of the full payment, rising with the loan amount.
- Two appraisals above a lane’s threshold amount.
- A cash cap on the largest lanes for cash-out transactions. Final terms depend on the lender’s guidelines, the property type, and the borrower’s complete credit picture.
These figures are subject to lender guidelines and full file review, and they are not a commitment to lend. The takeaway for a Texas borrower is the layering. The constitution gives you the outer wall. The lender’s rules sit inside it.
Lendmire arranges these loans as a mortgage broker through wholesale lenders. Its jumbo cash-out refinance program is built around the same lane structure described above, with the Texas rules applied on top.
When the Cap Blocks Your Goal
Sometimes the math says the cap, not your credit, is the problem. You want more cash than 80% of value allows. Here is how to think about the choices.
| If this is your situation | Option to consider | Tradeoff |
|---|---|---|
| Cap leaves too little cash | Wait and let the balance fall or value rise | Costs time, not money |
| Cap blocks a full refinance | Keep the first mortgage and look at a second-lien product | Second liens count toward the same 80% |
| Your goal is a lower payment, not cash | A rate-and-term refinance | Different rules; no cash beyond costs |
| Appraisal came in low | Review the appraisal with your lender | The value drives the ceiling |
A related option is to borrow less on purpose. Lendmire’s piece Should a Texas Homestead Owner Trim a Jumbo Cash-Out Below the Limit? walks through why a smaller loan can be the better structure.
Honestly, this is a toss-up for many borrowers. A full refinance may reach more cash. A smaller structure may leave a good first mortgage alone. The cap applies either way, so the answer comes down to what you are trying to do with the money.
Common Mistakes
- Assuming strong credit unlocks more. Credit helps with the jumbo lender’s test. It does nothing to the constitutional cap.
- Counting only the new loan. The cap counts every lien secured by the home.
- Using the zestimate as the ceiling. The appraisal on the day of the loan sets the number.
- Mixing up the two cancel clocks. The Texas waiting period and the federal right to cancel are separate.
- Expecting a bigger house to loosen the cap. It raises the dollars, not the percentage.
Key Terms Defined
Jumbo loan: A mortgage larger than the conforming limit for your county, which FHFA sets.
Section 50(a)(6): The part of the Texas Constitution that allows cash-out loans on a homestead and sets the rules for them. Lenders call these “A6” loans.
Combined-lien cap: The limit that your new loan plus all other debts secured by the home cannot exceed 80% of fair market value.
Fair market value: The home’s value on the day the loan is made, set by the appraisal.
Homestead: Your primary residence, which Texas law protects from forced sale for most debts.
Rescission: The federal right to cancel a refinance within a short window after closing.
Frequently Asked Questions
Can a jumbo lender go above 80% on a Texas homestead cash-out?
No. The cap is in the Constitution, so no lender or program can exceed it. Jumbo lenders can only set stricter terms, never looser ones. A program may advertise higher leverage for other transactions, but a Texas homestead cash-out stays under 80% of value across all liens.
Does the cap count only the new loan?
No. It counts the new loan plus all other debt secured by the homestead. A home equity line or second lien that stays in place reduces how much the new loan can be. A balance paid off at closing is generally treated differently, so confirm with your closing agent.
Does a higher home value mean I can borrow a bigger share?
No. The cap is a percentage of value, so an expensive home gets a larger dollar amount at the same 80%. The share does not change. What changes is the appraisal’s effect: a small difference in value moves the ceiling by more.
Is the Texas waiting period the same as the three-day cancel right?
No. The Texas notice and waiting period come before closing and are required by the state Constitution. The federal right to cancel comes after closing and applies to a refinance of your home. You get both, and one does not replace the other.
Does this apply if I am only doing a rate-and-term refinance?
Different rules apply. A rate-and-term refinance that takes no cash beyond closing costs is not a cash-out, though refinancing out of an existing home equity loan has its own conditions. Ask your loan officer which path fits your current loan.
Where to Go From Here
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. Start by asking what 80% of your home’s appraised value leaves after your current liens, since that number, not the jumbo label, sets your ceiling.
For your own numbers, request a scenario review with Lendmire.
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.
For the program’s current guidelines, see jumbo loan programs.
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References
1. FHFA – 2026 Conforming Loan Limit Values
2. Texas Attorney General Opinion KP-0183
3. Texas Constitution, Article XVI, Section 50
4. Texas Legislature – SJR 60 Bill Analysis
5. CFPB – Regulation Z, 12 CFR 1026.23, Right of Rescission
This article is part of Lendmire’s Jumbo Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: Can a Trust With a Co-Trustee Get a Jumbo Cash-Out? · How to Size a Jumbo Cash-Out on a Texas Homestead · Should a Texas Homestead Owner Trim a Jumbo Cash-Out Below the Limit?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Required disclosures. Lendmire (NMLS# 2371349) operates as a licensed mortgage broker, not a direct lender or depository. The discussion in this article is general in nature and should not be relied upon as financial, legal, or tax advice — every investment scenario is unique and should be reviewed by a qualified professional. Any loan inquiry is subject to lender underwriting, and this article is not a commitment to lend or a guarantee of approval. Mortgage rates, loan terms, and program guidelines vary by borrower, property, and state, and may change without notice. Equal Housing Opportunity. Verify licensure at NMLS Consumer Access.