The Quick Read: No, because the question has a false premise. On a Texas primary residence, a VA cash-out refinance is not available. The Texas Attorney General has concluded that the state’s home equity rules rule it out (Opinion KP-0183). On a Texas homestead, the better comparison is between the Texas-compliant options.
Texas VA cash-out estimate
Seeded with an example value, a typical balance, and a round cash request at the first-use fee; change any field.
Editable benchmark: 7.40% as of October 15, 2026 · Freddie Mac 30-year average via FRED®. A conventional market reference, not a VA cash-out refinance quote.
Illustrative starting assumptions: a $285,000 home value, a $157,000 current balance, the Texas homestead cap with the first-use funding fee 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.
Illustrative estimate only — not a Loan Estimate, approval, quote, or commitment to lend. The rate field carries the weekly Freddie Mac thirty-year conventional benchmark, a market reference and not a VA cash-out refinance quote; a VA loan is priced by the lender at lock. The total loan, funding fee included, is capped at the program leverage on the reasonable value; the fee follows the tier chosen. The cash available is what the cap allows less the balances paid off and the fee, before closing costs, which are not included. 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. The debt-to-income figure is a guideline; residual income decides a VA file. Licensed in sixteen states for consumer mortgages. On a Texas homestead the state constitution caps a cash-out refinance at eighty percent of value, fee included, and adds a waiting period, a prescribed closing location, and a fee cap; the calculator applies the Texas cap.
Why Is There No Fee to Weigh?
A Texas homestead cash-out is a home equity loan under Section 50(a)(6) of the state constitution. That section requires that the loan not be secured by any property beyond the homestead itself. The Attorney General treated the VA guaranty as additional security. That is the core of the conclusion.
The opinion was prompted by a request that described the state regulator’s position: veterans with VA loans could not take cash out through a Texas equity loan. The requester argued that a veteran with 50% equity taking out 30% would still sit inside the Texas cap. The opinion did not accept that argument.
Two cautions belong here.
- It is an opinion, not a court ruling. Lenders generally follow it, which is what matters for your file.
- Rules can change. Confirm the current position with your loan officer before you plan around any of this.
Here is the practitioner view. Across the wholesale programs Lendmire places VA files with, the Texas homestead question comes up often. Veterans see “100% cash-out” in national advertising and assume it applies everywhere. It does not apply here, and finding that out at the start saves a lot of wasted effort.
What Does the Subsequent-Use Fee Actually Do Elsewhere?
Outside Texas homestead rules, the fee works like this. VA describes the funding fee as a one-time payment that exists because the program has no monthly mortgage insurance. It is charged on the loan amount, not the purchase price. It goes to VA, not to your lender.
On a cash-out refinance, the schedule is simple. First use carries 2.15%. After that, the subsequent-use figure is 3.3% (VA Circular 26-23-06, Exhibit B). The fee can be financed into the loan. That keeps cash at closing low, but it also makes the balance larger. Program details are subject to lender guidelines and full file review.
Lendmire’s VA cash-out refinance program page lays out how the national structure works. That includes reaching up to 100% of appraised value with the financed fee included. Again, that national structure is where the fee debate belongs. It does not carry over to a Texas homestead.
For a deeper look at the fee itself, see Lendmire’s explainer VA Cash-Out Funding Fee Rules for First or Subsequent Use.
What Counts as “Subsequent Use”?
Subsequent use means you have used your VA loan benefit before, and VA treats this loan as another use. The label is about your benefit history, not your current loan. Your certificate of eligibility from VA is what settles it. Service requirements are VA’s rules.
Some points confuse people:
- A veteran exempt from the fee pays neither the first-use nor the subsequent-use figure. Exemptions include veterans receiving VA compensation for a service-connected disability.
- An exemption changes the fee, not the legality. An exempt Texas veteran still faces the homestead barrier.
- VA treats refinances other than the streamline as cash-out refinances for fee purposes. Confirm how your specific loan is classified on VA’s page before you plan.
How Does a Texas Homestead Change the Math?
Texas adds its own ceiling. The constitution caps the new loan plus all other liens at 80% of the home’s fair market value (Texas Constitution, Article 16). It also requires that the loan carry no personal liability, except in cases of fraud. Foreclosure is allowed only through a court order.
So even if the VA route were open, the 80% cap would sit far below the 100% national structure. A veteran with a large VA balance and little equity may not reach any cash out under any program. That is a separate problem from the fee.
| Feature | National VA cash-out | Texas homestead cash-out |
|---|---|---|
| Governing rule | VA program rules | State constitution, §50(a)(6) |
| Leverage reach | Up to 100% of value | 80% cap, all liens combined |
| VA funding fee | Yes, unless exempt | Not applicable |
| Extra collateral | VA guaranty applies | None permitted |
This is why the headline fee matters less than people think. The legal bar comes first.
What Are the Real Options for a Texas Homeowner With Prior VA Use?
Texas does allow cash-out on a homestead. It simply runs through a conventional 50(a)(6) loan rather than VA. Texas homeowners generally compare these paths:
| Option | What it does | Main tradeoff |
|---|---|---|
| Texas conventional cash-out | Replaces the first mortgage, pulls cash | New terms on the whole balance |
| Second lien | Adds a loan, keeps first mortgage | Two payments, same homestead rules |
| No-cash-out refinance | Changes terms only | No cash to the borrower |
| Keep current loan | Nothing changes | No access to equity |
A second lien keeps the terms of your existing first mortgage. That matters if your current loan is a good one you would rather not replace. A conventional cash-out resets everything.
Two Texas rules shape these choices. One is that only one 50(a)(6) loan can sit on a homestead at a time. The other is that Texas also sets a waiting period between such loans. A prior home equity loan on the property limits what comes next.
A homestead can have a cash-out refinance or a home equity line, but not both at once. They sit under the same constitutional section.
One sentence on edge cases. Occupancy decides leverage: a VA loan is for a home you live in, so a Texas property that is not your primary residence is a different conversation.
Is the Streamline Refinance Also Blocked?
The streamline, or IRRRL, refinances an existing VA loan with no cash to you. It carries a 0.5% fee unless you are exempt. It needs a net tangible benefit and a seasoning period. That period is the later of 210 days from your first payment and your sixth payment.
The opinion addressed a VA cash-out refinance, not the streamline. Whether a streamline works on your specific Texas homestead is a question for the lender’s compliance team. Ask early, and do not assume either answer.
Why Do Some Sources Say VA Cash-Out Works in Texas?
You may have read that it does.
Here is the practical reading. The Attorney General’s opinion says the homestead structure precludes it. Lenders that follow that opinion decline VA cash-out on Texas homesteads. Pages that say otherwise are often describing national VA rules, or a different situation, such as a loan that is not secured by a homestead.
If you find a lender saying yes, ask which rule it relies on. A good answer will cite the opinion and explain how the file avoids the problem. A vague answer is a warning sign.
Key Terms Defined
Subsequent use: Using your VA loan benefit again after an earlier use, which raises the cash-out funding fee.
Funding fee: A one-time charge paid to VA that can be financed into the loan and is waived for exempt veterans.
Homestead: Your primary residence, which Texas protects with its own constitutional lending rules.
Section 50(a)(6): The Texas constitutional section that governs home equity loans and cash-out refinances on a homestead.
Net tangible benefit: A VA test showing the refinance is in your financial interest.
Residual income: What is left of your income after major monthly obligations; for VA, it is the controlling underwriting test.
When Does the Fee Question Still Matter to You?
Plan around the fee if you are looking at a VA cash-out on a property outside Texas homestead rules. The decision there is a real cost-versus-use question. It comes down to what the cash does for you.
- A larger financed balance can pay off if the cash retires debt you could not otherwise clear.
- It can fall short if the cash funds spending that does not build value.
- If the fee is waived for you, the cost side of that question drops out.
For a Texas homeowner, skip the break-even exercise on the fee and compare the Texas options on structure instead. Ask what each does to your existing loan terms, how much equity it reaches under the 80% cap, and what it adds to your balance.
Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
Frequently Asked Questions
Can I do a VA cash-out refinance on my Texas primary residence?
Generally no. The Texas Attorney General concluded that the state’s homestead rules rule it out, and lenders follow that. It is an opinion rather than a court ruling, so confirm the current position with your loan officer.
Does being exempt from the funding fee change anything in Texas?
No. An exemption, such as one tied to a service-connected disability rating, removes the fee. It does not remove the legal barrier on a Texas homestead.
Is the subsequent-use fee 3.3% on every VA loan?
No. The 3.3% applies to subsequent-use cash-out refinances. Purchase loans use a schedule that depends on down payment. The streamline carries 0.5%. Exempt veterans pay none of these.
What can a Texas veteran do instead?
Compare a Texas conventional cash-out, a second lien, a no-cash-out refinance, or keeping the current loan. Each trades off leverage, balance and existing terms differently. A prior home equity loan on the property limits the choices.
Can the funding fee be financed on a cash-out?
Yes, on a VA cash-out outside the Texas homestead problem. The fee rolls into the loan balance, which raises the total owed. Program figures are subject to lender guidelines and full file review.
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.
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.
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References
1. Texas Attorney General Opinion KP-0183
2. VA funding fee and closing costs
3. VA Circular 26-23-06, Exhibit B
4. Texas Constitution, Article 16, Sections 26-50
This article is part of Lendmire’s VA Loans series — every loan program’s qualification details, guidelines, and scenarios live on the loan options page.
Related reading: How Much the Funding Fee Costs on a VA Cash-Out for a Texas Homestead · How to Size a VA Cash-Out on a Texas Homestead and Its Payment · How to Time a VA Cash-Out Seasoning Clock on a Texas Homestead
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.