The Quick Read: Texas caps how much you can borrow against the home you live in, and a jumbo loan does not change that cap. The ceiling is 80% of the home’s appraised value, counting every loan secured by the property. A jumbo lender can set a lower limit but never a higher one. So the equity you can pull out depends on the appraisal and on what you still owe.
At a Glance
- The cap comes from Texas law, not from the lender or the loan size.
- All liens count toward the 80%, not just the new loan.
- Jumbo lanes that reach 90% leverage do so on other purchase and refinance types. On a Texas homestead cash-out, the state ceiling binds first.
- Only a primary residence qualifies as a homestead.
- A mandatory waiting period and a cancellation window sit on either side of the closing table. Each figure is subject to lender guidelines and a complete review of property type, leverage, and credit.
What Does “Jumbo” Mean Here?
A jumbo loan is any mortgage above the county’s conforming limit. That limit changes every year and differs by county. The FHFA conforming loan limit announcement shows how the baseline is set and that the high-cost ceiling is 150% of that baseline. Look up your own county rather than assuming a number.
Jumbo loans are priced and underwritten by private investors. Because no agency buys them, the lender sets many of the rules. Credit, reserves, and appraisals tend to be tighter than on a conforming file.
Here is the part people miss. Jumbo status says nothing about the Texas homestead ceiling. Those are two separate rulebooks. One decides which investor takes the loan. The other decides how much equity you can touch.
How Do the Limits on a Texas Homestead Work With a Jumbo Loan?
The state ceiling sits on top of everything else. A Texas cash-out refinance on a homestead falls under the home-equity provisions of the Texas Constitution. The Texas Real Estate Research Center at Texas A&M explains that the new principal, added to all other debt secured by the home, cannot exceed 80% of fair market value on the date credit is extended.
Three points follow.
First, the measure is fair market value, which means the appraisal. Not what the neighbor sold for.
Second, the cap is combined. A second mortgage or home-equity line that stays on the property eats into the same 80%.
Third, no program overrides it. Conforming, jumbo, adjustable, fixed: none of them lifts the ceiling.
Across the wholesale programs Lendmire places files with, the headline jumbo lane reaches 90% leverage, and several lanes reach 89.99% combined leverage. The rest stop at 80%. Those higher figures apply to purchases and to loans outside the Texas homestead cash-out rules. For this loan, the practical limit is 80% or less, and cash-out is already set at lower leverage than purchase on every lane. Lendmire’s jumbo cash-out refinance program page lays out the lanes. Eligibility is subject to lender guidelines and full file review.
How Much Cash Can You Actually Pull Out?
Take the appraised value. Multiply by 80%. That is the most the new loan, plus any lien that stays behind, can total. Your cash-out is that loan minus the balance being paid off and minus closing costs.
Here is the arithmetic in percentages of the appraised value. These are illustrations of the rule, not quotes.
| Balance you are paying off | Room under the 80% ceiling | Cash-out before costs |
|---|---|---|
| 50% of value | 30% of value | Up to 30% of value |
| 60% of value | 20% of value | Up to 20% of value |
| 70% of value | 10% of value | Up to 10% of value |
| 75% of value | 5% of value | Up to 5% of value |
| 80% of value or more | None | None |
Closing costs and any second lien that stays come out of that room. That is why “equity on paper” misleads. A home worth far more than you paid can still leave little cash-out if you refinanced recently or carry a large balance.
Say you own a home with a 65% balance. You see a lot of equity. The ceiling leaves 15% of value, and costs trim it further. That surprises people most on higher-priced homes, where the balance itself is large.
What Does the Lender Check, Step by Step?
Here is the sequence in plain order.
1. Is this a homestead cash-out? The 80% rule attaches when the loan is a Texas home-equity loan. Fannie Mae’s Selling Guide on Texas home-equity eligibility warns lenders not to rely on cash-out labels alone and to confirm with counsel. A refinance that looks like a plain rate-and-term deal can still fall under the rule. So the lender checks.
2. Application and notice. You apply and receive a required Texas disclosure. The Texas Office of Consumer Credit Commissioner explains in its bulletin for regulated lenders that the 12-day waiting period starts only after you have applied and received that disclosure. Apply on Monday, get the disclosure Wednesday, and the clock starts Wednesday. A late notice moves the clock.
3. Appraisal and value acknowledgment. Fair market value rests on an appraisal, and you sign a written acknowledgment of that value. On jumbo files, the lane may call for two appraisals above its threshold amount. That is a lender-set rule layered on the state rule.
4. The leverage test. Every lien is added up against the 80% ceiling. Then the lender applies its own lane limits, which can be lower.
5. Your credit and cash flow. The headline jumbo lane works from a 660 decision score. Debt-to-income ratio ceilings are 50% on the fixed lanes, 45% on the adjustable lanes, and 43% on the interest-only lanes. Reserves are counted in months of the full payment and rise with the loan amount. All of this is subject to lender guidelines.
6. Closing, then cancellation. The loan closes at the office of the lender, an attorney, or a title company. Every owner and every spouse of an owner takes part in the paperwork. Funds do not go out until the cancellation window ends.
Two Waiting Periods, Not One
People blur these together. They are different rules.
The first is the Texas waiting period before closing. The second is the three-business-day right to cancel after signing. The Consumer Financial Protection Bureau explains that a refinance carries this federal right and that it can be waived only for a bona fide personal financial emergency. Texas law has its own three-day cancellation right as well. Both exist. Neither replaces the other.
Plan around both. If you are counting on a specific funding date for a project or a payoff, build in this sequence. Lendmire’s brokers can’t shorten these steps, and no honest one would claim to.
Where the General Rule Breaks
Rules like this have edges. Here are the ones that come up most on jumbo files.
Agency product rules versus jumbo
Fannie Mae’s rules for Texas home-equity loans apply to loans sold to Fannie Mae. They limit those loans to first liens, certain fixed and adjustable structures, and single-unit primary residences. A jumbo loan is not sold to Fannie Mae, so those product rules do not bind it. The 80% constitutional ceiling still does. Jumbo investors may add their own overlays on top. Those vary by lender and loan, and a broker confirms them before you apply.
Rate-and-term refinances
A refinance with no cash out may fall outside the home-equity rules. Do not assume. Texas also created a path to refinance an existing home-equity loan into an ordinary mortgage, described in the legislative analysis of the 2017 amendment. That path has its own notice and conditions, and the 80% test can still apply.
Second homes and rentals
Homestead protection covers a primary residence. A second home or rental sits outside these rules, and occupancy decides which leverage limit applies on the lane.
Only one loan at a time
Only one Texas home-equity loan can be secured by the home at a time. There are also limits on how soon you can do another. Ask your broker where you stand before you plan a second round.
The fee cap
Texas caps the lender’s own charges on these loans, with third-party costs such as the appraisal and title outside that cap. Jumbo files can still cost more overall than conforming ones. Compare the full Loan Estimate, not one line.
Payment structure
The loan must be scheduled to pay at least the interest each period, and agency rules call for regular amortization. Interest-only structures exist on some jumbo lanes, but they are a poor fit for this loan type. A lender confirms before you build a plan around one.
Large lots and rural homesteads
Texas protects homesteads by acreage rather than by dollar value. A jumbo lender can still limit lot size or property type on its own. A large or rural property needs an early check.
Spouses and co-owners
Non-borrowing spouses sign too. If one owner is out of town or out of reach, the file stalls. Line this up on day one.
What Happens If a File Gets It Wrong?
This is why lenders treat the rules seriously. A loan that misses a condition can be treated as invalid until it is cured. You want the strictest process, not the loosest.
On the borrower side, the state constitution also makes these loans non-recourse in most circumstances, meaning you are generally not personally liable beyond the home, absent fraud. Your attorney can explain how that applies to you.
What Your Decision Looks Like in Practice
Start with the equity math, not the program menu. Three questions sort most files:
1. What is the realistic appraised value? Be conservative.
2. What do you owe, including any second lien that would stay?
3. What do you need the cash for, and is the room under 80% enough?
If the room is thin, you have options. You can borrow less than the maximum. You can pay down a lien first. You can wait for the appraisal to catch up. You can also consider a rate-and-term refinance if you do not need cash. None of these is a workaround for the ceiling. They are ways to fit your goal inside it.
If the room is generous, the jumbo lane details matter. Reserves rise with loan size. Some lanes cap the cash you can take. Two appraisals can apply above a threshold. Lanes reach loans up to $5,000,000 at the top end, though the Texas ceiling will usually bring your loan well under what a lane could otherwise allow.
One honest tradeoff deserves a look. The 90% lane is attractive on paper. On a Texas homestead cash-out, it is the wrong yardstick. The stronger play is usually to compare lanes on credit score, ratios, reserves, and appraisal requirements, since leverage is fixed by the state.
Common Myths
“A jumbo loan can go past 80% in Texas.” No. The cap is constitutional and no loan program overrides it.
“Only the new loan counts.” Wrong. Every lien secured by the home counts.
“Day 12 means I get my money.” Not quite. The cancellation window comes after signing.
“Conforming limits and the homestead cap are the same thing.” They are unrelated. One decides which investor buys the loan. The other decides how much you can borrow.
Key Terms Defined
Homestead: The home you live in as your primary residence, which Texas law protects from most creditors.
Cash-out refinance: A new mortgage larger than your current balance, with the difference paid to you.
Combined loan-to-value (CLTV): All loans secured by the home, added together and divided by its appraised value.
Fair market value: What the appraisal says the home is worth on the date the loan is made.
Lien: A lender’s legal claim on your property until the debt is paid.
Rescission: Your right to cancel certain loans within a set window after signing.
Non-recourse: A loan where the lender generally cannot pursue you personally beyond the home, absent fraud.
Reserves: Savings you hold after closing, measured in months of the full housing payment.
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. Reach the team at 828-256-2183. Every figure here is subject to lender guidelines and full file review, and nothing on this page is a commitment to lend.
Frequently Asked Questions
Can a jumbo lender lend more than 80% of my Texas homestead’s value on a cash-out?
No. The 80% ceiling applies to all debt secured by the home and no loan program overrides it. A lender can choose a lower limit, which is common on larger loans.
Do my other mortgages count toward the 80%?
Yes. A second mortgage or home-equity line that stays on the property counts toward the same ceiling. If you pay it off in the refinance, it stops counting. Your broker can show how each choice changes your room.
Does the cap apply if I only want a lower balance or term, with no cash?
Possibly not, but a lender has to verify. Rate-and-term refinances can fall outside the home-equity rules, yet agency guidance tells lenders not to assume. Some borrowers with an existing Texas home-equity loan can also use a separate exit path, which has its own conditions.
Does the rule apply to a second home or rental I own in Texas?
No. Homestead rules cover a primary residence. On the jumbo lanes, occupancy decides the leverage limit, and a second home or rental sits at different limits than your own home.
What credit and ratio figures do jumbo cash-out lanes use?
The headline lane works from a 660 decision score, with debt-to-income ceilings of 50% on fixed lanes, 45% on adjustable, and 43% on interest-only. Reserves rise with the loan amount. All of this is subject to lender guidelines and full file review.
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.
Get Started
Ready to find the right loan for you?
In about 30 seconds you can review financing options available for your home or investment property. No commitment required.
Informational only. Not a Loan Estimate, approval, or commitment to lend. Program availability and eligibility are subject to lender guidelines, credit approval, property review, and underwriting.
References
1. FHFA conforming loan limit announcement
2. Texas Real Estate Research Center at Texas A&M: What to know about home equity loans in Texas
3. Fannie Mae Selling Guide: Texas Section 50(a)(6) loan eligibility
4. Texas Office of Consumer Credit Commissioner: Regulated lenders bulletin
5. Consumer Financial Protection Bureau: Waiving the right to rescind
6. Texas Legislature SJR 60 analysis
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 W-2 High Earner Get Conforming Leverage on a Jumbo Cash-Out? · How a Jumbo Cash-Out Refinance Sizes Cash Past the Conforming Limit · Can You Refinance a Texas Jumbo Cash-Out Loan for Better Terms?
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
- Mortgage Loan Originator · NMLS# 1129696 · Verify on NMLS Consumer Access
- North Carolina Real Estate Broker · License# 343312 · Verify on NCREC
- North Carolina Insurance Producer · License# 19053198 · Property, Casualty, Life, Health · Verify on NAIC SBS
- Lendmire LLC · Firm NMLS# 2371349 · Verify firm licensure
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.