Texas cash-out refinance rules: 80% cap, 12-day wait, once a year

8 min read · LenderMatch Learn

Yes, you can do a cash-out refinance in Texas, but on your homestead it must be made as a Texas home equity loan, often called a 50(a)(6) loan after the section of the state constitution that sets the rules. All debt on the home can total no more than 80% of its value, you wait at least 12 days before closing, you close at a lender, attorney or title company office, most fees are capped at 2%, you can cancel within 3 days, and you can do it only once every 12 months.

Below: each rule in plain English, how much cash 80% allows, the waiting periods, and when a Texas HELOC may fit better. When you are ready, LenderMatch lets you describe your home once and compare what Texas lenders offer.

• 80%Most all loans on your homestead can total
• 12 daysMinimum wait from application or notice to closing
• 2%Cap on most lender fees
• 12 monthsMinimum time between Texas home equity loans

What is a Texas 50(a)(6) loan?

Texas protects a homestead from forced sale except for the debts listed in Article XVI, Section 50 of the Texas Constitution. Subsection (a)(6) is the home equity exception, with a long list of conditions. Section 50(e) pulls cash-out refinances into it: a refinance that advances additional funds can be secured by your homestead only if it is a 50(a)(6) loan, or if all the extra money goes to reasonable refinance costs or a few listed purposes such as property taxes or home improvements. In practice:

• Cash-out refinance of a homestead: a 50(a)(6) loan, with every rule below.
• No-cash-out refinance: a regular refinance, unless the loan being paid off is itself a 50(a)(6) loan.

Fannie Mae’s Selling Guide notes that Texas law, not Fannie Mae’s refinance categories, decides whether a loan is a 50(a)(6) loan.

Texas cash-out refinance rules, one by one

Limits on the loan

• 80% combined limit on all debt secured by the homestead, measured at fair market value on the day the loan is made. You and the lender sign a written acknowledgment of that value.
• One at a time. It must be the only home equity loan on the homestead.
• Homestead only. No other property can secure the loan.
• 2% fee cap on most lender fees (details below).
• Equal payments, at least monthly, starting within two months of closing, each covering at least the interest due.

Before and at closing

• 12-day wait (see the waiting periods below).
• Final costs one business day ahead: an itemized disclosure of the actual fees, points and charges, unless you waive it in writing for a bona fide emergency or good cause.
• Closing at an office of the lender, an attorney or a title company, never at your home.
• Every owner and spouse consents in writing.

Your protections after closing

• 3 days to cancel without penalty, for you and your spouse.
• No prepayment penalty.
• No personal liability unless the loan was obtained by actual fraud.
• Court order required to foreclose, and no acceleration just because your home’s value drops.

Texas cash-out refinance at 80%: how much cash can you get?

Take a Texas home worth $313,200 (the median value of an owner-occupied Texas home, Census 2024 American Community Survey) with a $150,000 mortgage balance.

Example only. 7.40% is the Freddie Mac 30-year average for the week of October 15, 2026, not a quote. The lender’s appraisal sets the value, and lenders may approve less than the legal maximum. Principal and interest, calculated by LenderMatch.

The 80% cap counts all debt on the homestead, including any lien that stays in place. Try your own numbers in the home equity calculator at the 80% setting.

Texas cash-out refinance waiting period

Three clocks can apply:

1. The 12-day wait before closing. Texas rules count calendar days, and the day after the later of your application or receiving the notice is day 1. Example: you apply and get the notice on November 2, so day 1 is November 3 and the earliest closing day is November 14. An application can be made orally or online.
2. The 3-day cancellation window after closing, in calendar days (extended past a Sunday or federal legal holiday). Lenders must also follow the federal three-business-day rescission rule where it applies.
3. Seasoning of the loan you are paying off. A loan program rule, not a Texas one. For a conventional cash-out loan sold to Fannie Mae, the first mortgage being paid off must be at least 12 months old (note date to note date), and one borrower must have been on title for six months.

How often can you do a cash-out refinance in Texas?

Once every 12 months. A Texas home equity loan cannot close before the first anniversary of any other 50(a)(6) loan on the same homestead, whether or not the earlier loan was paid in full, according to the state’s official interpretation. The one exception: you request an earlier closing under oath because of a state of emergency declared by the President or the Governor for your area. A loan can still be modified within a year, but a modification may not advance new money.

The Texas 2% fee cap: what counts

Lender fees to originate, evaluate, maintain, record, insure or service the loan may not exceed 2% of the original principal. Some costs are outside the cap:

• Interest, and bona fide discount points you pay to buy down your rate.
• An appraisal by a third-party appraiser.
• A survey by a state registered or licensed surveyor.
• The state base premium for a mortgagee title insurance policy with endorsements.
• A title examination report, if it costs less than that base premium.

So total closing costs can exceed 2% of the loan. Ask each lender which fees fall inside the cap. (Before 2018 the cap was 3%, with none of these exclusions.)

Refinancing out of a 50(a)(6) loan later

Once a homestead loan is a 50(a)(6) loan, a later refinance must either be another 50(a)(6) loan or meet the conditions of Section 50(f)(2), added by Texas voters in 2017. A 50(f)(2) refinance turns it into a regular mortgage if:

• it closes at least one year after the home equity loan closed;
• it adds no new cash beyond paying off existing homestead debt and actual costs and reserves the lender requires;
• total debt on the home stays at or under 80% of its fair market value; and
• the lender gives you a written notice at least 12 days before closing (and no later than the third business day after you apply).

In the notice’s own words, a non-home equity refinanced loan “will permit the lender to foreclose without a court order” and “will be with recourse for personal liability against you and your spouse.”

Can you get a HELOC after a cash-out refinance in Texas?

Not while the cash-out loan is still a 50(a)(6) loan. Texas allows only one home equity loan on a homestead at a time, and a Texas HELOC is a 50(a)(6) loan too. The 12-month rule also applies between them. If you think you may need more money later, a HELOC up front can be the more flexible choice.

Cash-out refinance on a Texas rental or investment property

The Section 50 rules protect your homestead, the home you live in. A rental or second home that is not your homestead is outside them, so a cash-out refinance on it follows the lender’s and loan program’s usual guidelines rather than the 50(a)(6) list.

Texas cash-out refinance vs HELOC: when a HELOC fits better

Both are Texas home equity loans with the same 80% cap and protections. The difference is what happens to your current mortgage.

Back to the $313,200 home. Say the $150,000 balance carries 3.25% with 25 years left (about $731 a month), and you need $60,000. A $210,000 cash-out refinance at 7.40% for 30 years is about $1,454 a month. Keeping the 3.25% loan and drawing $60,000 on a Texas HELOC at an assumed 8.00% (the 7.00% prime rate as of October 20, 2026, plus a 1.00% margin, for illustration only) adds $400 in interest-only payments: about $1,131 a month in total.

A HELOC may fit better when your current rate is well below today’s, when you need money in stages (Texas HELOC draws must be at least $4,000 each), or when you may want more later without closing another loan. A cash-out refinance may fit better when your current rate is near or above today’s, or when you want one fixed payment on the whole amount. Our Texas HELOC guide covers the HELOC-only rules; cash-out refinance vs HELOC compares the two nationally.

Frequently asked questions

Can you do a cash-out refinance in Texas?

Yes. On your homestead, a refinance that gives you new cash must be made as a Texas home equity loan under Article XVI, Section 50(a)(6) of the Texas Constitution, with its 80% limit, 12-day wait, 2% fee cap and 3-day right to cancel.

What is the Texas 80% rule for a cash-out refinance?

All debt secured by your homestead, including the new loan, cannot exceed 80% of its fair market value on the day the loan is made: $250,560 on a $313,200 home.

How often can you do a cash-out refinance in Texas?

Once every 12 months, even if the earlier home equity loan has been paid off. The only exception is a declared state of emergency, if you request an earlier closing under oath.

What is the 12-day letter in a Texas cash-out refinance?

It is the required Texas home equity notice. The loan cannot close until the 12th calendar day after the later of your application and receiving this notice.

Can you get a HELOC after a cash-out refinance in Texas?

Not while the cash-out loan is still a Texas home equity loan. Texas allows only one Section 50(a)(6) loan on a homestead at a time, and a Texas HELOC is one too.

Does LenderMatch check my credit?

No. LenderMatch never pulls your credit. A lender you choose may check it, with your permission, when you apply.

See Texas HELOC rules and offers or compare refinance options →