Texas has some of the most protective home equity laws in the country. If you are borrowing against the home you live in — your homestead — your HELOC is governed by Article XVI, Section 50(a)(6) of the Texas Constitution. Those rules decide how much you can borrow, how long the process takes, and what protections you get. This guide walks through the parts that matter most when you apply.
Why Texas HELOCs are different
In most states, a HELOC is governed mainly by federal lending rules and the lender's own guidelines. In Texas, homestead protection is written into the state constitution, and home equity lending on a homestead is only allowed when the loan meets a specific list of requirements in §50(a)(6). A HELOC that doesn't follow them can put the lender's lien at risk, so every lender in Texas builds its homestead process around them.
These rules apply only to your homestead. A HELOC on a rental or investment property or a second home is not subject to them.
The 80% combined loan-to-value cap
The rule with the biggest effect on how much you can borrow: the total of all debt secured by your homestead — your first mortgage plus the new HELOC — cannot exceed 80% of the home's fair market value. This is called the combined loan-to-value, or CLTV.
Here is a simple example:
| Home value | $400,000 |
|---|---|
| 80% of value | $320,000 |
| Current first-mortgage balance | $200,000 |
| Maximum HELOC line (before credit and income review) | $120,000 |
Best Suited Mortgage offers primary-residence lines from $25,000 to $750,000, up to that 80% CLTV limit. Your actual line also depends on your credit score, income, and the appraised value. You can estimate your own numbers with the HELOC rate pricer.
The 12-day notice and waiting period
Texas requires a cooling-off period before a homestead home equity loan can close. The loan cannot close until at least 12 days after the later ofthe date you submit your application or the date you receive the required Texas home equity notice (the “Notice Concerning Extensions of Credit”). The notice explains your rights under §50(a)(6) in plain language.
The waiting period exists to give homeowners time to consider the decision. It can't be skipped, so the earliest your homestead HELOC can close is on day 12.
Why closings take 12–15 days
A typical Best Suited Mortgage HELOC closes in 12–15 days. For a homestead, two Texas timelines stack: the 12-day notice period before you can sign, then the 3-day rescission period after you sign, before funds are released. Underwriting, verifying income, valuing the property, and title work all run during the 12-day notice period, so a well-documented file can close on schedule. Delays usually come from missing documents or title issues, which is why it helps to have your paperwork ready (see the Texas HELOC requirements guide).
Your 3-day right to rescind
The 3-day rescission period comes on top of the 12-day notice. After you sign, Texas gives homestead borrowers the right to cancel the home equity loan without penalty within three days after closing. Funds are released after that window passes.
Other Texas homestead protections to know
- Owner and spouse consent.The lien must be voluntary and created with the consent of each owner and each owner's spouse.
- One at a time, once a year.A Texas home equity loan must be the only home equity debt on your homestead (your purchase-money first mortgage is fine), and a new one generally can't close until one year after the closing of any prior home equity loan on the same home.
- Where you close. A homestead home equity loan must close at the office of the lender, an attorney, or a title company.
- Fee limits. Fees to originate, evaluate, maintain, record, insure, or service the loan are capped at 2% of the original principal, not counting interest, bona fide discount points, and certain excluded items such as a third-party appraisal, a survey, and the title insurance premium.
- Court-ordered foreclosure and no personal liability. A Texas home equity lien on a homestead can only be foreclosed with a court order, and the loan is without recourse for personal liability against the owners and their spouses (except in cases of actual fraud).
- Final disclosure before closing. You must receive the final itemized disclosure of fees, points, interest, and costs at least one business day before closing.
- HELOC draw rules.For a Texas home equity line of credit, each advance must be at least $4,000, and advances can't be taken with a credit card, debit card, or similar device.
These protections are part of why Texas home equity lending takes a bit more process than in other states. If you have questions about how a specific rule applies to you, ask your loan officer or a Texas real estate attorney.
How Best Suited Mortgage HELOCs are structured
- Lines from $25,000 to $750,000 on a primary residence (amounts above $500,000 are primary-only)
- Up to 80% CLTV on a Texas homestead
- Minimum 600 FICO for a primary residence
- 3-year draw period with interest-only payments on what you draw
- 75% of the line is drawn at closing
- Your first mortgage, rate, and payment stay unchanged — the HELOC is a second lien
- Soft credit pull to check your rate
- Property must be held in your personal name; Texas properties only
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