A lake house, a Hill Country getaway, a place on the coast — if you own a second home in Texas, its equity can be tapped with a HELOC without touching your primary home or the second home's existing mortgage.
Second home HELOC terms
| Line amount | $25,000 – $500,000 |
|---|---|
| Minimum FICO | 640 |
| Max CLTV, 720+ FICO | 90% |
| Max CLTV, 700–719 FICO | 85% |
| Max CLTV, 640–699 FICO | 75% |
| Draw period | 3 years, interest-only on the amount drawn |
| Drawn at closing | 75% of the line |
| Typical close | 12–15 days |
How a second home differs from your homestead
Texas's strict home equity rules in Article XVI §50(a)(6) — including the 80% combined loan-to-value cap — protect your homestead, the home you live in as your primary residence. A second home isn't your homestead, so those homestead-specific limits don't apply. That's why a second home can qualify for up to 90% CLTV with a 720+ FICO, while a primary residence is capped at 80%.
The trade-offs: the minimum credit score is higher (640 vs. 600), and the maximum line is $500,000 rather than $750,000.
What counts as a second home vs. an investment property
A second home is a property you use yourself part of the year. If the property is rented out as a long-term rental, it's usually treated as an investment property instead — see the investment property HELOC guide. The terms for second homes and investment properties in this program are the same, so let your loan officer know how you use the property and they'll classify it correctly.
CLTV example
Say your second home is worth $350,000, you owe $150,000 on it, and your FICO is 730. At 90% CLTV, the combined limit is $315,000, leaving room for a line of up to $165,000, subject to credit, income, and appraisal. At a 705 FICO (85% CLTV), the room would be $147,500.
Common uses
- Renovating or furnishing the second home
- Funding a down payment on another property
- Keeping a line available for large planned expenses
Requirements
- Property located in Texas
- Held in your personal name at closing (no LLC or trust)
- Minimum 640 FICO
- Income verification and property valuation
Ready to check your numbers? The HELOC pricerlets you pick “second home” as the property type, and the rate check uses a soft pull. You can also start from the investment property HELOC page, which uses the same terms.
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