The Quick Read: Yes, but only up to 80% combined loan-to-value, and that is also the ceiling for every cash-out loan on a Texas homestead. A jumbo cash-out can match what a conforming cash-out reaches on a one-unit primary residence, but it cannot go higher. Some jumbo lanes stop short of that ceiling because of their own leverage tiers. Every program detail here is subject to lender guidelines and full file review, and nothing is a commitment to lend.
Why Does Texas Cap a Jumbo and a Conforming Loan at the Same Level?
The Texas Constitution caps leverage by the type of loan, not by its size. A cash-out loan on a homestead is a “50(a)(6)” loan, and the new loan plus every other debt secured by the home cannot exceed 80% of fair market value. The text of Article XVI, Section 50 says this directly, and the Texas Real Estate Research Center at Texas A&M confirms that the borrower must keep at least 20% equity.
Now compare that with the agency side. Fannie Mae’s eligibility matrix allows a one-unit primary-residence cash-out up to 80%. For two to four units, the matrix drops to 75%. Terms vary by lender guidelines, property type, leverage, credit profile, and full file review.
So on a homestead the two numbers meet at the same point. The state cap is the binding limit, and loan size does not move it.
What Counts as Jumbo, and Does Texas Treat It Differently?
A jumbo loan begins one dollar above the county’s conforming limit. That limit is set each year by the Federal Housing Finance Agency and varies by county and unit count. This article does not quote the dollar figure because it changes.
Jumbo loans, which exceed the conforming limit and so fall outside what Fannie Mae and Freddie Mac buy, go to private investors instead. Those investors write their own guidelines.
| Factor | Conforming cash-out | Jumbo cash-out |
|---|
| Texas 80% homestead cap | Applies | Applies |
|---|---|---|
| Leverage tiers | Agency matrix | Set lane by lane |
| Reserves and appraisals | Agency rules | Scale with amount |
Texas does not change the definition of jumbo. It changes how much leverage any jumbo lane can use on a homestead.
Which Limit Binds First?
The lower of the lane’s own ceiling and the Texas cap controls, every time. This is the point most borrowers miss.
Across the wholesale jumbo programs Lendmire works with, leverage reaches 90% on the headline lane. Several lanes reach 89.99% combined, and the rest stop at 80%. On a purchase in Texas, those higher tiers can matter. On a Texas homestead cash-out, they cannot. The state cap sits below them, so the effective ceiling is 80%.
Cash-out also runs at lower leverage than purchase on these programs. Some lanes add a cash cap on the largest loans. In practice, a lane that stops at 80% already sits at the Texas limit, and a lane with a lower cash-out tier sits below it.
Here is the order to test:
1. The Texas 80% combined cap.
2. The lane’s own cash-out leverage tier.
3. Any cash cap that applies at your loan size.
4. Your credit, ratio and reserve profile.
The smallest of the first three sets your ceiling.
How Do You Calculate the Ceiling? (A Worked Example Without Dollars)
Take 80% of the appraised value, then subtract every lien of record. What remains is the most the new loan can be. The cap counts the first mortgage, any second lien and any HELOC.
Picture a homeowner whose appraisal comes in at a round number, and whose existing first mortgage is 45% of that value. The room under the Texas cap is 35% of value. Before costs, that is the most new debt that could sit on the home.
Now flip it. Suppose the existing balance is already 70% of value. Only 10% of value is left, and a cash-out may not be worth the effort.
Two things follow. First, a low appraisal shrinks the ceiling directly. Second, the 80% test uses the fair market value the lender and borrower acknowledge in writing at closing, so the appraisal does the real work.
Whether the resulting loan lands in jumbo or conforming territory depends on the balance against the county’s limit. A homeowner who pays off a smaller first mortgage and takes modest cash may land under the limit. A homeowner with a larger payoff plus cash may cross it. Same cap, different lane.
Why Don’t Higher-Leverage Lanes Carry Over?
They are written for loans the Texas Constitution does not restrict. The 90% tier on the headline lane applies to purchases and to cash-out in states without a homestead cap. In Texas, the cash-out is a 50(a)(6) loan, and the constitutional ceiling overrides any higher recommendation from an automated underwriting system or lender matrix.
That is why a jumbo lender’s marketing figure and your Texas ceiling can differ. Neither is wrong. They answer different questions.
A piggyback structure doesn’t solve it either. The cap is combined, so a second lien counts toward the same 80%. Only one equity loan or line can be open at a time, and a new subordinate lien on a 50(a)(6) first is generally not permitted under agency guidelines.
What Procedural Rules Shape a Large Cash-Out?
Texas adds steps that other states don’t have. These apply whatever the loan size.
- Advance notice. The lender must give a written notice, and the loan cannot close until a waiting period has passed after the later of the application or receipt of the disclosure, per the Texas Office of Consumer Credit Commissioner. Timing varies by file and lender.
- Fee cap. Lender-controlled origination and related fees are capped at 2% of the original principal. Appraisal, survey and the base title premium sit outside it, per 7 TAC §153.5. On a jumbo balance, 2% is still a large amount.
- Closing location. The loan may close only at the office of the lender, an attorney or a title company.
- Right to cancel. Federal law gives a primary-residence refinance borrower a rescission window, as the CFPB explains.
- Non-recourse. Texas equity loans are non-recourse absent fraud.
The notice period and the 3 business days set a minimum, and the rest of the file adds to it.
What Happens to a Later Refinance?
A cash-out loan stays classified as a 50(a)(6) loan, and a new one generally cannot close until a year after the existing equity loan did. Confirm the seasoning detail against the statute with your title company or attorney, since trade sources differ in how they describe it.
A later refinance out of the classification into a standard mortgage is possible under Section 50(f)(2). It requires no cash beyond payoff and closing costs, total debt at or under 80%, and its own 12-day notice. A borrower with a large jumbo balance should plan for that path before taking the first cash-out.
Paths Compared
| Path | Cash to borrower | Cap applies | Keeps current first |
|---|---|---|---|
| Cash-out refinance | Yes | 80% combined | No |
| HELOC on existing first | Yes | 80% combined | Yes |
| Fixed equity loan | Yes | 80% combined | Yes |
| No-cash-out refinance | No | Different test | No |
Which fits depends on whether the existing first mortgage is worth keeping. If it carries terms you want to hold on to, a second-lien path preserves it. If you want one loan, a cash-out refinance does that. Counting the number of liens matters here, since only one equity loan or line may be open at a time.
When Does This Not Fit?
These rules apply to an owner-occupied Texas homestead only. Occupancy decides leverage in the jumbo lanes, with second-home and investment occupancy carrying their own lane-specific tiers, and those are not homestead loans. A manufactured home or a two-to-four unit property has lower agency cash-out limits too.
Some lenders also add conditions that the constitution does not require, such as limits on trust ownership or non-occupying co-borrowers. Those are lender policy, not Texas law.
Key Terms Defined
50(a)(6) loan: A Texas home equity loan or cash-out refinance secured by a homestead, governed by Section 50 of the Texas Constitution.
Combined loan-to-value (CLTV): The total of all liens on the home divided by its appraised value.
Exact terms depend on the lender’s guidelines, property type, leverage, and a full review of the borrower’s file.
Jumbo loan: A loan one dollar above the county’s conforming limit.
Seasoning: The waiting period after an earlier loan before another can close.
Frequently Asked Questions
Can a jumbo cash-out in Texas go above 80%?
No. The constitutional cap applies no matter the loan size or credit profile. Higher tiers on some jumbo lanes apply to purchases and to states without a homestead cap.
Does the 80% apply only to the new loan?
No. It applies to the new loan plus every other lien of record, including a second mortgage or HELOC. A large existing balance leaves less room for cash.
Will a jumbo lender always reach the full 80%?
Not always. Some lanes set their own cash-out tier below the state ceiling, and some add a cash cap on the largest loans. Ask which tier applies to your lane and loan size.
Can I skip the waiting period if I pay for it?
No. The 12-day notice applies regardless, and the three-business-day right to cancel follows closing. These set a minimum timeline.
Does the cap apply to a rental or second home?
No. Homestead status requires a primary residence, so those properties fall under different leverage tiers.
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. Lendmire’s jumbo cash-out refinance program arranges loans through wholesale lenders, subject to lender guidelines and full file review. Tax treatment can depend on your situation; borrowers should speak with a qualified tax professional before relying on any deduction or credit.
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 jumbo loan programs.
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References
1. Texas Constitution, Article XVI, Section 50
2. Texas Real Estate Research Center at Texas A&M
3. Fannie Mae Eligibility Matrix
4. Federal Housing Finance Agency
5. Texas Office of Consumer Credit Commissioner
6. 7 TAC §153.5
7. CFPB
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: How Much Cash in Hand a Jumbo Cash-Out Allows Past the Conforming Limit · 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
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.