Using Your Home Equity in Texas
Your home may be one of your most valuable assets. Years of ownership may have built equity you can put to use. Zillow put the typical Texas home value at $296,424 as of September 2026. The Texas Real Estate Research Center at Texas A&M reported statewide prices were largely flat to slightly down year over year through mid-2026, but longer-term gains tell a different story.
According to the FHFA House Price Index, Texas home prices rose 25.11% over the past five years. Those gains varied widely by location, ranging from 15.25% in the Austin metro to 47.99% in El Paso. Your local market, remaining mortgage balance, and current home value all help determine how much equity you have and how much you can borrow.
A home equity loan or home equity line of credit (HELOC) can help you access that equity, but Texas has its own constitutional requirements for home equity lending. This guide explains how these options work in Texas and the rules that apply. For a broader introduction, visit our home equity loans and lines of credit hub.
Sources: Zillow home value data through September 2026 and Federal Housing Finance Agency House Price Index data for 2026Q2, released in August 2026.
Griffin Funding’s Home Equity Options in Texas
Learn more about each program on our HELOC, fixed-rate HELOC, and home equity loan pages.
Griffin Funding offers four ways to borrow against your home equity in Texas. Two are fully digital. Two are traditional programs that go up to $1 million and let you qualify with bank statements or rental income instead of tax returns. On Texas’s typical home, worth about $296,424, the state’s constitutional 80% homestead cap means total debt on a primary residence can reach roughly $237,000; a homeowner who owes half the home’s value could access around $89,000. Second homes and investment properties sit outside the homestead cap, so qualified borrowers can reach 90% of the property’s value there. Every program starts with a soft credit pull, so you can see your offers without touching your credit score, and none of them carries a prepayment penalty when you qualify with your own income.
Digital Variable-Rate HELOCVariable rate · $25,000 to $750,000 · funds in days
Digital Fixed-Rate HELOCFixed rate · $25,000 to $750,000 · 5-minute pre-approval
Traditional HELOCVariable rate · $100,000 to $1,000,000 · alt doc friendly
Fixed-Rate HELOANFixed rate · $100,000 to $1,000,000 · one lump sum
Every program: soft credit pull to see your pre-approval and offers; a hard pull happens only after you accept. No prepayment penalty when you qualify with your own income; the DSCR HELOC has none, and the DSCR HELOAN offers options with or without one (see the investor section below).
“Max borrowing” is combined loan-to-value (CLTV): your existing mortgage plus the new loan, as a share of your home’s value. Maximums step down at lower credit scores. Variable rates are indexed to the WSJ Prime Rate plus a margin. Loans above the no-appraisal thresholds require a full appraisal; digital fixed-rate HELOCs from $400,000 to $750,000 also require a 760+ credit score. On the digital variable-rate HELOC, amounts above $500,000 are for primary homes only; on the HELOAN, amounts above $750,000 are for primary homes only. Figures reflect Griffin Funding’s standard home equity programs as of October 2026 and are subject to change. Actual amounts, rates, and terms depend on your credit profile, property type, income documentation, and available equity. On a Texas homestead (your primary residence), Article 16, Section 50(a)(6) of the Texas Constitution caps total secured debt at 80% of fair market value on every program, caps lender fees at 2% of the loan amount, and requires a 12-day waiting period after application; second homes and investment properties are not subject to these homestead limits. This is not a loan offer or a guarantee of approval.
Home Equity Options for Texas Real Estate Investors
Investors who document income can borrow up to 90% of a Texas investment property’s value through the digital variable-rate HELOC with a 720+ credit score. If you’d rather not share personal income documents at all, Griffin Funding offers DSCR versions of both products that qualify on the property’s rent instead:
DSCR HELOC: A line of credit on an investment property that qualifies when the rent covers at least 110% of the payment. Lines from $100,000 to $500,000, with credit scores starting at 720, at up to 70% of the property’s value, with no personal income documents, no cash reserves required, and no prepayment penalty.
DSCR HELOAN: A fixed-rate lump sum from $100,000 to $500,000 at up to 80% of the property’s value with a 720+ credit score (credit scores start at 680), qualifying when the rent covers the full payment. LLCs and corporations can borrow with a personal guaranty, so you don’t have to move the property out of your entity to close. The DSCR HELOAN comes with or without a prepayment penalty: penalty options step down over one to five years and typically carry better pricing, and no-penalty options are available if you plan to pay off or refinance early.
A cash-out refinance makes sense if you want to access your home equity while replacing your current mortgage. Unlike a HELOC or home equity loan, it combines your mortgage balance and the equity you borrow into a new loan, with cash paid to you at closing. In Texas, cash-out refinancing on a primary residence is subject to the Section 50(a)(6) homestead lending rules outlined below.
We offer cash-out refinancing for homeowners. If you’re purchasing a home, a piggyback loan pairs a primary mortgage with a HELOC or home equity loan at closing, which helps you avoid private mortgage insurance (PMI) or jumbo loan pricing.
How Much Can You Borrow With HELOCs and HELOANs in Texas?
Equity is the difference between your home’s current market value and your remaining mortgage balance. A HELOC or home equity loan lets you borrow against that equity, but your borrowing limit depends on the property’s homestead status, our requirements, and your qualifications.
For a primary residence that qualifies as your Texas homestead, Article 16, Section 50(a)(6) of the Texas Constitution limits the combined loan-to-value to 80% of the property’s value. A higher credit score does not increase that limit. Under our program’s guidelines, the homestead must be a one-unit residence on fewer than 10 acres; only one Section 50(a)(6) loan can be outstanding on the property at a time. For second homes and investment properties that are not the borrower’s homestead, we offer financing up to 90% of the property’s value with a credit score of 720 or higher, and cash-out is permitted on the home equity loan version of that program. Lower borrowing limits can apply for borrowers with lower scores.
For example, if your home is worth $350,000 and you owe $200,000, the 80% homestead limit allows total debt of up to $280,000. Subtract your mortgage balance, and you could potentially borrow up to $80,000. For an eligible second home or investment property, a 90% limit would allow total debt of $315,000, leaving up to $115,000 in available equity. That’s a $35,000 difference based on the applicable borrowing limit.
If you own your home outright, there’s no mortgage balance to subtract. Your potential borrowing amount is based on the property’s value and the applicable lending limit, including the 80% cap for a Texas homestead. A first-lien HELOC serves as the only loan secured by the property, with loan amounts up to $1,000,000 for eligible borrowers and properties.
How much equity can you actually access in Texas’s housing markets? The table below shows the typical home value and the estimated cash available at 70%, 80%, and 90% combined loan-to-value (CLTV). Figures assume an existing mortgage balance of 50% of current home value, so your actual accessible equity may differ. For a Texas homestead, only the 70% and 80% columns apply; the 90% column is reachable on second homes and investment properties, which sit outside the constitutional homestead cap.
You may qualify for more than shown. These figures assume a mortgage balance equal to 50% of your home’s value. If you owe less, your accessible equity is higher. A Dallas homeowner with a $358,242 homestead who owes $110,000 could access about $177,000 at the 80% Texas homestead cap, well above any program minimum.
2026 HELOC and HELOAN Rates in Texas
As a direct-to-consumer lender, we offer several home equity financing options. Your credit score, available equity, property type, loan program, and market conditions determine your rate. Variable-rate HELOCs track the Prime Rate, while home equity loans offer fixed interest rates. Fixed-rate HELOCs are also available, with terms set by the program.
What Do You Need to Qualify for Home Equity Programs in Texas?
Eligibility depends on your available equity, income documentation, credit profile, mortgage payment history, and loan program. Requirements vary by property type.
- Equity value: For a Texas homestead, your new home equity financing and existing secured debt combined cannot exceed 80% of the home’s value, regardless of your credit score. Second homes and investment properties can qualify for higher borrowing limits, depending on the program, credit score, loan amount, and property type.
- Stable income: Requirements depend on how you earn income. Self-employed borrowers can qualify using 12 months of bank statements instead of tax returns. Real estate investors can qualify using the property’s rental income through a debt service coverage ratio (DSCR) program.
- Minimum credit: Griffin Funding offers certain home equity options for credit scores starting at 600, although many programs require higher scores. Traditional HELOCs and home equity loans require a minimum credit score of 660.
- Mortgage payment history: Lenders review recent mortgage and housing-payment history. The required lookback period and treatment of late payments vary by program.
- Debt-to-income ratio: We accept debt-to-income ratios up to 50%. DSCR programs instead evaluate the property’s rental income against its debt payments.
Our Texas homestead financing has requirements beyond the equity limit. Under Article 16, Section 50(a)(6) of the Texas Constitution, each owner and each owner’s spouse must consent to the home equity lien, even if the spouse is not on title. Generally, a new Section 50(a)(6) loan cannot close until at least one year after the previous Section 50(a)(6) loan on the same homestead, subject to limited exceptions. Only one such loan may be outstanding on the property at a time, so an existing home equity second lien must be paid off when completing a new homestead cash-out refinance. Additional property, occupancy, and borrower requirements depend on the loan program.
Second homes and investment properties fall outside these specific Texas homestead restrictions when they are not used or claimed as a homestead. Available property types include single-family homes, planned unit developments (PUDs), condos, and two- to four-unit homes, based on program requirements. Griffin Funding reviews the property’s use, ownership, and supporting documentation to confirm its status and eligibility. The absence of a property-tax homestead exemption alone does not establish a property’s homestead status in Texas.
Texas-Specific Home Equity Considerations
Texas home equity lending rules are written into the state constitution and apply to homestead properties. Article 16, Section 50(a)(6) limits the combined loan-to-value ratio to 80% of the home’s value, requires at least 12 days’ notice before closing, and requires a court order for foreclosure. Second homes and investment properties that do not qualify as homesteads fall outside these specific constitutional restrictions. Here’s what to consider before applying.
Texas Home Equity Loan and HELOC Closing Costs
Closing requirements in Texas depend on the property securing the loan. For a home equity loan or HELOC secured by a Texas homestead, Section 50(a)(6)(N) of the Texas Constitution requires closing at the office of a lender, attorney, or title company. Second homes and investment properties outside Texas homestead protections provide more flexibility for electronic closings or mobile notary services based on lender and title company requirements.
Under Article 16, Section 50(a)(6)(N) of the Texas Constitution, a home equity loan or HELOC secured by a Texas homestead must close at the office of the lender, an attorney, or a title company. This in-person requirement is why remote or fully digital closings are available on second homes and investment properties that fall outside the homestead rules, while Texas homestead closings take place in person. Texas homestead loans also have a mandatory waiting period. Closing cannot occur until at least 12 days after you submit your loan application and receive the required home equity disclosure. This waiting period cannot be waived, even for a financial emergency.
After closing, you generally have three business days to cancel a loan secured by your principal residence before funds are disbursed. Texas homestead borrowers receive this protection under both federal law, including the Truth in Lending Act (TILA), and Article 16, Section 50(a)(6)(Q)(viii) of the Texas Constitution. Federal law lets you waive this waiting period only in a genuine financial emergency. The waiver does not remove any separate waiting period required by the Texas Constitution. These rescission protections generally do not apply to second homes or investment properties that are not homesteads.
Closing costs include recording, title, appraisal or valuation, notary, and lender fees. For Section 50(a)(6) homestead loans, Article 16, Section 50(a)(6)(E) caps fees at 2% of the loan amount. The cap excludes third-party appraisal and survey fees, title insurance premiums, and bona fide discount points. Your total closing costs can exceed 2%.
For a closer look at potential expenses, read our guide to HELOC closing costs.
Texas Foreclosure Process
Texas mortgage foreclosures commonly follow a nonjudicial process, allowing a lender to sell the property under a deed of trust without filing a lawsuit. For many residential mortgage loans, you must receive at least 20 days’ notice to cure the default before your lender can send the required notice of sale. Your lender must generally provide at least 21 days’ notice of the foreclosure sale. These are minimum notice periods, and other requirements extend the timeline. Sales typically take place on the first Tuesday of the month at a designated county location. Texas generally doesn’t give borrowers a statutory right to redeem the property after a nonjudicial mortgage foreclosure sale.
Home equity loans secured by a Texas homestead require a court order under Article 16, Section 50(a)(6)(D). Lenders can obtain that order through an expedited proceeding under Texas Rule of Civil Procedure 736. Your response is generally due by the first Monday after 38 days have expired from the mailing date stated in the citation. Section 50(a)(6)(C) also protects you and your spouse from personal liability for the debt, subject to constitutional exceptions such as actual fraud. Loans secured by second homes and investment properties that do not qualify as homesteads generally follow the standard nonjudicial process without this specific court-order requirement.
Texas Property Tax Reassessment
Texas homestead exemptions serve two distinct purposes: reducing property taxes and protecting your home from creditors. The Texas Comptroller confirms that your general school-district residence homestead exemption is $140,000, with the increase applying retroactively to the 2025 tax year. Separately, Texas Tax Code Section 23.23 generally limits annual increases in a home with a homestead exemption. This limits growth in your taxable value, not your tax bill itself.
Creditor protection under Article 16, Section 51 is based on acreage rather than a dollar limit. It covers up to 10 acres for an urban homestead or, for a rural homestead, up to 100 acres for a single adult and 200 acres for a family. These protections shield your home from creditor claims, but they do not prevent foreclosure under a valid mortgage lien, including a Section 50(a)(6) home equity loan.
Texas Rules on Spousal Consent for Home Equity Financing
Texas requires spousal consent for home equity financing on a homestead. This requirement comes from the state’s constitutional homestead protections, rather than its community property rules. Under Article 16, Section 50(a)(6)(A), each owner and each owner’s spouse must consent to the home equity lien.
If you’re married, your spouse must sign the required lien documents for your Texas homestead, even if they aren’t on the title or the home is your separate property. Second homes and investment properties that do not qualify as homesteads are outside this specific consent requirement.
Apply for a Home Equity Loan or HELOC in Texas
We serve homeowners across Texas, including Houston, Dallas-Fort Worth, San Antonio, Austin, and El Paso. A home equity loan or HELOC can help you fund renovations, invest, consolidate debt, or create a financial cushion without replacing your existing first mortgage. Start with a soft credit pull to explore your options in minutes, with no effect on your credit score.
Connect with a loan officer serving Texas to compare programs, or get started online today.
Reach out to a Texas loan officer to compare programs, or get started online today.
- KC Dirksen, Griffin Funding Texas Loan Officer | NMLS# 2668049
- Denise Tran, Griffin Funding Texas Loan Officer | NMLS# 2652352
- Kent Garner, Griffin Funding Texas Loan Officer | NMLS# 1262819
- Adam Ruvelson, Griffin Funding Texas Loan Officer | NMLS# 1283827
Griffin Funding Home Equity Financing: Where We Lend
Open the list below for local home equity guidelines, draw and repayment terms, and rate guidance from a loan officer licensed in your market.
Not sure if we lend in your state? Request a quick quote and a licensed loan officer will confirm home equity availability in your area.
Frequently Asked Questions
Can I pay off my home equity loan or HELOC early?
Yes. We do not charge a prepayment penalty on home equity programs that qualify you using your own income. DSCR HELOCs also have no prepayment penalty. DSCR HELOANs come with or without a prepayment penalty; options with a penalty typically carry better pricing.
Do Texas home equity loans and HELOCs have closing costs?
Most HELOCs and home equity loans have closing costs, including appraisal, title, and lender fees. HELOC closing costs commonly range from $500 to $5,000, though some estimates run from 2% to 5% of the credit line, depending on the lender, loan amount, and location. Home equity loans typically involve similar expenses.
For Texas homestead loans, the state constitution limits lender fees to 2% of the loan amount. Qualifying third-party appraisal and survey fees, title insurance premiums, and bona fide discount points are excluded, so total closing costs can exceed that limit. Closing must take place at the office of a lender, attorney, or title company.
Some lenders offer “no closing cost” HELOCs, but usually offset those savings through a higher rate or an early closure fee. Review your loan disclosures carefully and explore our guide to HELOC closing costs for more details.
Can I get a HELOC or home equity loan on a second home or investment property in Texas?
Yes. We offer both options for eligible Texas second homes and investment properties. Properties that do not qualify as homesteads fall outside the state’s 80% homestead borrowing cap. Under Griffin Funding’s digital variable-rate HELOC guidelines, borrowers with a credit score of 720 or higher can access up to 90% combined loan-to-value (CLTV) on eligible second homes and investment properties. Investment properties require full income documentation. Other programs have limits ranging from 70% to 90%. Borrowing limits depend on the loan program, credit score, loan amount, income documentation, occupancy, and overall financial profile.
Depending on the program, eligible properties include single-family homes, planned unit developments (PUDs), condos, and two- to four-unit homes. Documentation requirements vary: a HELOC requires confirmation that the property is not your homestead; a second-home equity loan requires proof that the property has no Texas homestead exemption; and an investment-property equity loan requires proof of a homestead exemption on your actual primary residence. Investors can also qualify based on rental income through a debt service coverage ratio (DSCR) HELOC or home equity loan.
What credit score do I need for a HELOC in Texas?
600. The minimum credit score for a Griffin Funding HELOC in Texas depends on the loan program, property type, requested credit-line amount, and combined loan-to-value (CLTV) ratio. Griffin Funding offers home equity options for credit scores starting at 600. Our digital HELOCs require a minimum score of 600, and traditional HELOCs and home equity loans start at 660.
Higher credit scores can provide access to larger credit lines, higher CLTV limits, and more favorable pricing. However, Texas homestead properties are subject to additional state-specific restrictions. Under the Texas Constitution, a home equity loan generally cannot cause the total debt secured by the homestead to exceed 80% of the home’s fair market value. A Texas HELOC also has specific constitutional requirements governing the credit line and advances.
Griffin Funding’s digital prequalification process can use a soft credit inquiry that does not affect your credit score, while a hard inquiry may be required during the formal application and underwriting process. For Texas properties, the applicable program and Texas-specific home equity rules determine the final credit, CLTV, and closing requirements.
Can I cancel a home equity loan after signing?
Yes. Texas homestead borrowers have separate protections before and after closing. Before closing, at least 12 days must pass after your application or receipt of the required disclosure, whichever is later. This waiting period cannot be waived, even for a financial emergency.
After closing, you generally have three business days to cancel a loan secured by your principal residence. For Texas homestead loans, this protection comes from both federal law and Article 16, Section 50(a)(6)(Q)(viii) of the Texas Constitution. Federal law permits a waiver only for a documented financial emergency, but that waiver does not remove the separate Texas constitutional protection. These cancellation rights generally do not apply to second homes or investment properties.
Can I qualify using bank statements instead of tax returns?
Yes. We offer HELOC and home equity loan programs that accept 12 to 24 months (HELOC) or 12 months (HELOAN) of bank statements instead of traditional income documents. These options help self-employed borrowers, freelancers, and business owners document income through bank deposits.
Griffin Funding accepts bank-statement documentation for HELOCs on primary residences, second homes, and investment properties, as well as HELOANs on eligible properties. Loan amounts and occupancy limits vary by program, with loan amounts up to $1,000,000 on primary residences and up to $750,000 on second homes and investment properties. Texas properties are also subject to state-specific home equity requirements that can affect available loan amounts and terms. Learn more about home equity loans and lines of credit and bank-statement loan options.
Can I qualify after bankruptcy?
Yes, after a four-year waiting period. Griffin Funding’s home equity programs require four years from the bankruptcy discharge or dismissal date. Once the four-year period has passed, Griffin Funding may consider your HELOC or HELOAN application as long as you’ve maintained a positive credit history, made your mortgage payments on time, and meet the program’s underwriting requirements.
If you’re still within the four-year waiting period, Griffin Funding offers recent credit event loans for borrowers recovering from bankruptcy, foreclosure, or another major credit event. These mortgage programs have different eligibility requirements and loan structures than traditional HELOCs and HELOANs, providing an alternative financing option before the four-year period ends.
Can my LLC get a home equity loan on a Texas investment property?
Yes. Griffin Funding offers DSCR home equity loans for Texas investment properties titled in an LLC or corporation, allowing the property to remain in the entity’s name. Qualification is based primarily on the property’s rental income and debt-service coverage rather than personal employment income, eliminating the need for personal tax returns, W-2s, pay stubs, or personal debt-to-income calculations.
The fixed-rate DSCR home equity loan provides $100,000 to $500,000 as a lump sum, requires a minimum credit score of 680 and a DSCR of at least 1.0, and allows up to 80% combined loan-to-value (CLTV) for borrowers with credit scores of 720 or higher.
Griffin Funding also offers a DSCR HELOC for LLC-owned investment properties. This revolving credit line has separate credit score, DSCR, CLTV, and prepayment requirements. Entity, ownership, guaranty, title, and underwriting requirements apply to both programs.
Transferring a property out of an LLC or corporation to obtain financing can affect its title, insurance, taxes, liability protection, existing mortgage, and operating agreement. Confirm the financing structure with Griffin Funding, your title provider, insurer, and legal or tax adviser before changing ownership.