The Quick Read: In Texas, the solar item on your title is usually a UCC-1 filing from a solar lender or lessor, not a PACE assessment, because the state’s PACE program does not cover homes with up to four units. PACE on a Texas house is rare, but it is not impossible, so check for it. Either way, the obligation generally has to be paid off, released or subordinated before a new first-lien cash-out can fund. The payoff typically comes out of your cash-out proceeds, so your net cash shrinks by that amount. Everything below is subject to lender guidelines and full file review.
Key Takeaways
- Texas’s PACE program excludes homes with up to four units, so a “solar lien” on a Texas home is most often a UCC-1, a recorded lien or a lease or PPA agreement. A PACE assessment is rare, and the tax statement and title commitment are where you confirm it.
- A PACE assessment, if you do have one, is different. It rides on the property tax bill, stays with the home and can sit ahead of a mortgage.
- A Texas cash-out on a homestead is a home equity loan, and the 80% combined cap counts every lien. A solar balance left in place uses room under it, and a payoff folded into the new loan counts toward it too.
- A payoff reduces net cash. It does not add to it.
- Find out which instrument you have before you apply, not a week before closing.
Which Instrument Do You Actually Have?
Start by naming the instrument. The fix depends entirely on what it is.
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.
| Instrument | Attaches to | How to spot it | Typical fix |
|---|---|---|---|
| UCC-1 filing | The panels | State-level search | Payoff, then UCC-3 termination, or subordination |
| Fixture filing | Panels as fixtures | County land records, title commitment | Release or subordination |
| Recorded solar lien | The property | Title commitment | Payoff and recorded release |
| PACE assessment | The property, via tax bill | Tax statement | Full payoff |
| Lease or PPA | Contract, not a loan | Agreement, monthly bill | Buyout or provider cooperation |
Fannie Mae’s Selling Guide lists four common solar structures: borrower-owned, leased, separately financed and power purchase agreement (PPA). PACE is a fifth, built on a tax assessment instead of a contract. Jumbo loans are not sold to Fannie Mae, so treat its rules as an industry benchmark, not the jumbo rule. Jumbo lenders set their own overlays, and no neutral source publishes them.
Why Texas Rarely Has Residential PACE
Texas passed its PACE Act in 2013, now Local Government Code Chapter 399. The Texas Comptroller describes the state program as financing for commercial and industrial properties. Multifamily eligibility starts at five units, per the AACOG-affiliated Universal City program page. San Antonio’s program report says residential property is not eligible, which covers single-family homes and anything under five units.
So the Texas program does not offer PACE on a primary residence, and an assessment on one should be rare. If one turns up, the most likely explanation is a home someone bought or owned while living in another state, such as California or Florida. Don’t assume either way. Check the tax statement and the title commitment.
A five-unit-plus building can carry PACE in Texas, but that is commercial financing and a different conversation from this one.
PACE vs. a Solar UCC-1: Why They Aren’t the Same Problem
A PACE obligation is a tax assessment. The CFPB defines PACE financing as home-improvement financing that results in a tax assessment on the consumer’s real property. It is repaid through the property tax bill, typically over 10 to 20 years, and it stays with the home when ownership changes. It can also hold priority over a mortgage. That priority is why agencies treat it so seriously: Fannie Mae requires borrowers with enough equity to pay off an existing PACE obligation as a condition of a new mortgage.
A solar UCC-1 works differently. The CFPB’s solar financing spotlight says lenders commonly file UCC liens on the panels. Technically that lien is not on the property, but it can muddy title. If a jurisdiction treats it as reaching the whole property, it must be released or subordinated to the new mortgage.
Short version. PACE is a tax-collection problem. A UCC-1 is a title-clouding problem. Both are solvable, but not with the same paperwork.
How to Confirm What’s on Your Property
Work through this list before you apply.
1. Read your property tax statement. A PACE assessment shows up as a line item.
2. Pull the title commitment. It surfaces recorded liens and county fixture filings.
3. Run a state-level UCC search. A county search can miss a standard UCC-1. A Texas law firm, Silbernagel Law, notes that solar UCC-1 statements are filed with the Texas Secretary of State.
4. Find your solar paperwork. The installation contract, loan agreement, lease or PPA tells you which structure you have.
5. Ask the provider for a payoff statement. Get it in writing, with the termination or release process spelled out.
Why bother searching twice? Because a clean county report doesn’t prove a clean state record.
How to Clear Each Type
UCC-1 with a financed system. Pay the balance in full. The filer then submits a UCC-3 termination statement to release the lien. If the filing stays in place, the provider may instead sign an agreement acknowledging the new lender’s senior position. That is called subordination.
Recorded solar lien. This needs a payoff and a recorded release, and your title company confirms it cleared.
PACE assessment. The payoff must be in full. Fannie Mae’s cash-out refinance rules carve out an exception for paying off PACE or energy-only debt, which shows how agencies treat it as a clean-up item. Across the wholesale jumbo programs Lendmire places files with, the same logic generally holds: a priority tax assessment doesn’t stay in place beside a new first lien.
Lease or PPA. There is no loan to pay, so the question is whether the lender will accept the contract. Lease payments usually count in the debt ratio. PPA payments based only on energy produced may be left out, though each lender decides. A transfer with provider consent is a sale issue, not a refinance one. A buyout may be the cleaner path.
Court relief. If a company won’t release an improper claim, an owner may seek a declaratory judgment. Treat that as a last resort.
The Texas Overlay: Your Cash-Out Is a Home Equity Loan
A Texas cash-out on a homestead is a Section 50(a)(6) home equity loan. That brings rules a refinance in other states doesn’t have.
- The 80% combined cap. The equity loan plus all other liens of record cannot exceed 80% of the home’s fair market value. The cap counts every lien. A solar balance left in place uses room under it, and a payoff folded into the new loan counts toward it as well, so the payoff is part of the total either way.
- A waiting period. The constitution requires a wait until the 12th day after the later of application or delivery of the required notice. The text is in Article XVI, Section 50.
- Fee and closing rules. Texas also caps lender fees and requires closing at a lender, attorney or title office. Confirm both against the primary text.
- Homestead only. The route applies to a Texas homestead. A second home or rental can’t use it.
Here the jumbo lane’s own limits come in. Cash-out runs at lower leverage than purchase, and the largest lanes carry a cash cap. Texas’ 80% ceiling sits on top of that, so whichever is tighter controls your proceeds.
A “second loan avoids the cap” idea is a common misconception. It doesn’t, because the cap counts every lien.
What Does a Payoff Do to Your Cash?
Run it in percentages. Say your home appraises at a given value and the Texas cap holds total liens to 80% of that figure. Your existing first mortgage uses part of that room. The solar payoff, paid from proceeds at closing, uses more. Whatever remains under the cap, and under the jumbo lane’s own cash-out leverage, is the most the loan can deliver.
Two effects follow:
- The payoff comes out of your proceeds, so net cash falls by that amount.
- Your monthly budget improves, because the solar or PACE payment goes away once it’s paid. PACE can also carry higher costs than traditional products, according to a law-firm summary of the CFPB’s view.
Appraisal matters too. Owned panels generally follow standard eligibility. Leased and PPA panels are generally left out of appraised value, per secondary sources citing Fannie Mae. Since the 80% cap runs off appraised value, whether the panels count changes the cash available.
If you borrow near the top of the range, the numbers get tighter. Wholesale jumbo lanes reach leverage up to 90% on purchases and loans up to $5,000,000 on the largest lanes. Cash-out sits lower, and Texas sits lower still at 80% combined. The headline figures are real, but they aren’t the figures that govern a Texas cash-out. Subject to lender guidelines and full file review.
A Timeline That Keeps the Surprise Out
| Stage | What to request |
|---|---|
| Before applying | Tax statement, solar contract, provider payoff request |
| Application | Disclose the solar or PACE item |
| Title and appraisal | Title commitment, state UCC search |
| Underwriting | Payoff letter, release or subordination terms |
| Closing | Payoff paid from proceeds; confirm termination filing |
| After closing | Verify the UCC-3 or release was filed |
Paperwork that has to be cleared can hold up a closing. A title-company blog from Skyline Title Support says provider consent and transfer paperwork can add weeks to escrow. Start the payoff request early.
What If It Can’t Be Cleared First?
You have a few options, and each has a tradeoff.
| Option | Upside | Tradeoff |
|---|---|---|
| Pay off at closing from proceeds | Simplest; one new loan | Cuts net cash |
| Pay off before applying | Cleaner file | Needs outside cash |
| Subordination | Keeps the solar loan | Needs provider agreement; lender must accept |
| Wait | Time to resolve disputes | Delays the plan |
For PACE, there is no real fallback. A cash-out can’t leave a priority lien in place. One third-party summary describes a Fannie Mae path where PACE stays in place when equity is short. That conflicts with the guide’s own text, so don’t count on it, and it wouldn’t carry over to a Texas cash-out regardless.
If a title company surfaces a UCC-1 late, ask whether a termination or subordination fixes it, and call the provider the same day. Provider response time is the variable you can’t control.
Does Texas Homestead Law Make a UCC-1 Harmless?
Partly. A Texas homestead is protected from forced sale except for specific debts: purchase money, taxes, qualifying equity loans and properly contracted work-and-material liens, listed in Article XVI, Section 50. A Texas law-firm article argues a standard solar UCC-1 doesn’t attach to the homestead land, so the finance company can’t foreclose on the house.
That’s the legal argument. The practical one is different. A title company may still require the filing be cleared, and a lender will follow the title company. Winning the legal point doesn’t close the loan.
A mechanic’s lien is a separate case. On a homestead it needs a written contract signed by both spouses and filed with the county clerk before work begins, per the State Bar of Texas. An unpaid installer could claim a lien only if those steps were met.
How the Jumbo Lane Changes the Picture
Jumbo starts one dollar above the county conforming limit, which the FHFA resets each year. Because jumbo lenders keep their own rules, their handling of a solar UCC-1 against the Texas cap can differ from agency practice. No public source documents it, so a broker’s file review is how you find out.
From the files Lendmire arranges across the wholesale jumbo lanes, a few patterns hold. Reserves scale with the loan amount, and larger loans may call for two appraisals above a lane’s threshold. A 660 decision score anchors the headline lane, and the ratio ceiling is 50% on the fixed lanes. Those are the program basics. A solar payoff changes your debt picture, which can help with the ratio, while the payoff itself changes your proceeds.
If you want to see how these lanes compare for your file, start with the jumbo cash-out refinance program.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Key Terms Defined
UCC-1: A filing that gives a creditor a security interest in equipment, such as solar panels.
UCC-3: The termination statement filed to release a UCC-1 after payoff.
Fixture filing: A UCC filing recorded in county land records because the equipment is attached to the property.
PACE assessment: Home-improvement financing repaid through the property tax bill and tied to the property.
Subordination: An agreement where a creditor accepts a lower priority than the new mortgage.
Cloud on title: Any record that makes ownership or lien priority unclear.
Frequently Asked Questions
Can a PACE loan stay in place after a Texas jumbo cash-out?
No, not in practice. A cash-out can’t leave a priority lien behind, and agency rules treat PACE as a payoff item. Texas’ program also excludes homes with up to four units, so PACE on a Texas house is rare. If one shows up, check whether it came from a prior out-of-state owner.
Does a solar UCC-1 count against the 80% Texas cap?
Yes, in both cases. A payoff folded into the new loan counts toward the cap, because the cap covers all liens of record, and a balance left in place also uses room. How a jumbo lender treats a UCC-1-only filing isn’t publicly documented, so ask during file review.
Will a title search catch my solar filing?
Not always. A county search can miss a standard UCC-1, while a state-level search catches it. A fixture filing in the county records is more likely to show on the commitment.
What happens to leased or PPA panels?
There’s no loan to pay off, so the issue is the contract. Lease payments usually count in your debt ratio, PPA payments tied only to energy produced may not, and the panels are generally left out of appraised value.
Does paying off solar change how much cash I get?
Yes. The payoff comes out of proceeds, so your net cash is lower. Your monthly obligation drops once the solar or PACE payment ends.
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. Every figure here is subject to lender guidelines and is not a commitment to lend.
For your own numbers, request a scenario review with Lendmire.
About Lendmire
Lendmire — NMLS# 2371349 — is a mortgage broker that arranges FHA, VA, conventional and jumbo home purchase and refinance financing in 16 states through wholesale lenders. Every option is subject to the lender’s guidelines and full underwriting. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
For current guidelines, see jumbo loan programs.
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References
1. Fannie Mae Selling Guide B2-3-04
2. Texas Comptroller PACE page
3. AACOG-affiliated Universal City program page
5. Silbernagel Law: Texas solar UCC-1 filings
6. Fannie Mae Selling Guide B2-1.3-03
7. Texas Constitution Art. XVI, Section 50
9. Skyline Title Support: clearing solar UCC liens at closing
10. Texas Constitution Art. XVI, Section 50
This article is part of Lendmire’s jumbo cash-out refinance program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: How a Jumbo Cash-Out Closes on a Texas Homestead With Two Appraisals · Jumbo Cash-Out Requirements With a Solar Lien or Unpermitted Addition · How to Clear an Unpermitted Addition Before Your First Jumbo Cash-Out
Guides: Jumbo Cash-Out Refinance in Texas
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.