Texas [HELOC Rates](/blog/best-heloc-lenders-2026) & Lenders: Your 2026 Guide to Home Equity Lines of Credit

If you're a Texas homeowner looking at a HELOC, you need to know something upfront: Texas has the most unique home equity lending laws in the entire country. These laws, rooted in the Texas Constitution, create both protections and restrictions that don't exist anywhere else.

The good news? Texas's booming housing market—particularly in metros like Austin, Dallas-Fort Worth, Houston, and San Antonio—means many homeowners have built substantial equity. The state's strong economy and population growth continue to drive demand. But accessing that equity through a HELOC comes with Texas-specific rules you absolutely must understand.

Texas Housing Market Overview

Texas is the nation's second-largest housing market by volume, and values vary enormously by metro:

• Median [home value](/blog/appraisal-process-explained) (statewide): Approximately $310,000
• Austin metro: $450,000–$490,000 (cooled from 2022 peak but stabilizing)
• Dallas-Fort Worth metro: $370,000–$400,000
• Houston metro: $310,000–$340,000
• San Antonio metro: $280,000–$310,000
• El Paso: $220,000–$250,000

Austin experienced the most dramatic boom-and-correction cycle, with prices surging over 50% from 2020 to 2022 before pulling back 10–15%. DFW and Houston have shown steadier growth. Across all metros, homeowners who purchased before 2022 generally have solid equity positions.

Texas's economy remains a powerhouse—diverse across energy, technology, healthcare, and defense—with unemployment near 4.0% and continued in-migration from California, Illinois, and the Northeast.

Current HELOC Rates in Texas

Texas HELOC rates are broadly competitive with national averages, though the state's unique regulations can affect pricing:

Important: Some online lenders and even some national banks don't offer HELOCs in Texas because of the state's complex legal requirements. This slightly reduces competition compared to other states. Lenders that do operate in Texas have generally built the compliance infrastructure and are well-versed in the rules.

Texas Home Equity Lending Laws: What Makes Texas Different

This is the most important section of this guide. Texas's home equity rules are enshrined in Article XVI, Section 50 of the Texas Constitution, and they create significant differences from every other state:

The 80% LTV Cap

Texas law limits all [home equity borrowing](/blog/home-equity-loan-vs-heloc-2026) to 80% of your home's fair market value—combined. This includes your first mortgage plus any home equity debt. There is no exception, and no lender can exceed this limit regardless of your creditworthiness.

Example: Your home is worth $400,000, and you owe $280,000 on your mortgage. The maximum combined debt is $320,000 (80% of $400,000). Your maximum HELOC would be $40,000 ($320,000 – $280,000).

This is stricter than most states, where lenders commonly go to 85% or even 90% CLTV.

The 3% Fee Cap

Total fees charged by the lender cannot exceed 3% of the loan amount. This includes origination fees, appraisal costs, and many other closing costs. Some costs (like title insurance and survey fees) are excluded from the cap. This is actually a strong borrower protection—it keeps closing costs in check.

The 12-Day Closing Rule

There's a mandatory 12-day waiting period from the date you submit your home equity application to closing. You cannot waive this. After closing, there's an additional 3-day rescission period (standard federal rule). So from application to funding, you're looking at a minimum of 15 days.

One Home Equity Loan at a Time

Texas law historically limited homeowners to one home equity loan (or HELOC) at a time on their homestead. A 2017 constitutional amendment relaxed this somewhat—you can now refinance a home equity loan into a non-home-equity loan if your LTV is at or below 80%—but the general rule still constrains your options.

No Foreclosure for Small Debts

Lenders cannot foreclose on a Texas homestead for a home equity debt of less than a certain threshold. Combined with Texas's strong homestead protections generally, this provides meaningful borrower protection.

Agricultural Property Restrictions

If your property is designated as agricultural (and many rural Texas properties are), home equity lending rules are even more restrictive. Some agricultural properties are ineligible for HELOCs entirely.

[HELOC Requirements](/blog/heloc-application-process-step-by-step) in Texas

Beyond the constitutional requirements, standard lending criteria apply:

• Credit score: 680+ for best rates; 640 minimum at most Texas lenders
• CLTV: Hard cap at 80% (constitutionally mandated)
• DTI: 43%–45% maximum
• Equity: At least 20% (consequence of the 80% CLTV cap)
• Property type: Must be your homestead (primary residence). Texas home equity laws apply specifically to homestead property.
• Income: Standard documentation; Texas's large self-employed and contractor population means many lenders are experienced with non-W-2 income

Best HELOC Lenders in Texas

Local and Regional Options

Frost Bank San Antonio-headquartered Frost Bank is one of Texas's most respected financial institutions. Their HELOC products feature competitive rates, transparent fee structures that comply comfortably with the 3% fee cap, and loan officers who thoroughly understand Texas home equity law. Branches across major Texas metros.

Texas Capital Bank Dallas-based Texas Capital serves higher-balance borrowers well, with HELOC products tailored to Texas's unique requirements. Their private banking group handles larger home equity lines efficiently.

RBFCU (Randolph-Brooks Federal Credit Union) One of the largest credit unions in Texas, RBFCU consistently offers among the [lowest HELOC rates](/blog/best-heloc-rates-2026) in the state. Based in the San Antonio area with branches across Texas. Their loan officers are deeply experienced with Texas home equity compliance.

UFCU (University Federal Credit Union) Austin-based UFCU offers competitive HELOC rates and excellent member service. Particularly popular with Austin-area borrowers who've seen significant equity gains.

Navy Federal Credit Union While not Texas-specific, Navy Federal has a huge Texas membership base (given the state's large military presence) and offers excellent HELOC rates. Membership requires military affiliation.

National Lenders in Texas

U.S. Bank One of the national lenders most experienced with Texas home equity law. Offers HELOCs with no closing costs on many products and provides fixed-rate lock options.

Bank of America Active in Texas with Preferred Rewards discounts. Their compliance team is well-versed in Texas constitutional requirements.

Regions Bank Strong Southeast and Texas presence. Competitive HELOC products with rate-lock features.

Third Federal Savings & Loan Online lender known for low HELOC rates nationally. They lend in Texas and understand the regulatory framework, though processing may take longer due to compliance requirements.

Note: Some popular online HELOC lenders—including some well-known fintech names—do not lend in Texas due to the complexity of compliance. Always verify Texas availability before spending time on an application.

Tax Implications of a Texas HELOC

Like South Dakota and Tennessee, Texas has no state income tax. This simplifies the tax picture:

• No state income tax: HELOC interest deductibility is purely federal
• Federal deduction: Interest is deductible if funds are used to buy, build, or substantially improve the home securing the loan (up to $750,000 combined mortgage debt)
• Non-qualifying use: Interest on funds used for other purposes (debt consolidation, education, etc.) is not deductible
• Improvement documentation: Given that many Texas homeowners use HELOCs for storm damage repairs, pool additions, or energy efficiency upgrades, keep detailed records and receipts

Texas Property Tax Context

This is where the no-income-tax advantage meets reality. Texas property taxes are among the highest in the nation:

• Average effective property tax rate: Approximately 1.60%–1.80% (varies significantly by county and school district)
• Median annual property tax: $4,500–$5,500 statewide
• Harris County (Houston): Can exceed 2.0% effective rate
• Travis County (Austin): Roughly 1.60%–1.80%
• [Homestead exemption](/blog/homestead-exemption-guide): Texas offers a $100,000 school district homestead exemption (increased from $40,000 in 2023), plus additional exemptions for seniors and disabled homeowners
• Protest rights: Texas homeowners can (and should) protest their property valuations annually

When calculating HELOC affordability in Texas, property taxes are a critical factor. A $400,000 home in suburban Houston might carry $7,000–$8,000 in annual property taxes. Add a HELOC payment and your total housing costs can rise quickly.

How to Get the Best HELOC Rate in Texas

1. Understand the 80% cap first. Calculate your maximum borrowing amount before shopping. Don't waste time with lenders who might quote terms that can't legally close in Texas.

2. Prioritize Texas-experienced lenders. The complexity of Texas home equity law means experienced lenders close faster and with fewer hiccups. Frost Bank, RBFCU, and U.S. Bank are all proven Texas operators.

3. Shop credit unions aggressively. RBFCU, UFCU, and other Texas credit unions offer meaningfully lower rates than most banks. Membership requirements are usually easy to meet.

4. Watch the fee cap. The 3% fee cap protects you, but make sure your lender's quote accounts for all fees within the cap. Ask for a detailed fee breakdown.

5. Plan for the timeline. The 12-day waiting period plus the 3-day rescission period means minimum 15 days from application to funding. If you need funds quickly, apply early. You cannot speed up this constitutional requirement.

6. Get a current appraisal. Given the 80% CLTV cap, every dollar of appraised value matters. If you believe your home has appreciated significantly, a full appraisal (rather than an AVM or desktop appraisal) may justify a higher line amount.

Frequently Asked Questions

Why do some lenders not offer HELOCs in Texas?

Texas's constitutional home equity rules—the 80% CLTV cap, 3% fee limit, 12-day waiting period, and other requirements—create compliance obligations that some lenders, particularly online-only and out-of-state lenders, choose not to handle. The penalties for non-compliance are severe (the loan can be forfeited), which raises the stakes for lenders.

Can I get a HELOC on a Texas investment property?

Texas's constitutional home equity restrictions apply specifically to your homestead (primary residence). Investment properties are not subject to the same constitutional rules, but they're subject to standard commercial lending criteria—higher rates, lower LTV limits, and stricter qualification requirements. Fewer lenders offer investment property HELOCs in any state.

What happens if I exceed the 80% LTV limit in Texas?

A lender cannot legally close a home equity loan that exceeds 80% LTV on a Texas homestead. If somehow a loan closes in violation of this constitutional provision, the borrower has the right to have the loan declared void, and the lender may forfeit all [principal and interest](/blog/amortization-schedule-guide). This is one of the strongest borrower protections in the country.

Can I convert my Texas HELOC to a fixed-rate loan?

Yes. Many Texas lenders offer fixed-rate conversion options within your HELOC, allowing you to lock a portion or all of your balance at a fixed rate. Additionally, since the 2017 constitutional amendment, you can refinance a Texas home equity loan into a conventional rate-and-term refinance (sometimes called a "Texas cash-out to rate-and-term conversion") if your LTV is at or below 80%.

How do Texas HELOC rules affect hurricane or storm damage repairs?

If you need funds for storm repairs, the 12-day waiting period can be frustrating. Texas law does not provide an emergency exception to the waiting period for HELOCs. However, some homeowners work around this by applying proactively before storm season or by using a personal loan for immediate repairs and then refinancing into a HELOC. Insurance proceeds should always be pursued first.

The Bottom Line

Getting a HELOC in Texas requires more homework than in most states. The constitutional 80% LTV cap limits how much you can borrow, the 12-day waiting period slows the process, and not all lenders operate here. But the protections—fee caps, strong homestead protections, and clear legal frameworks—are genuinely beneficial for borrowers.

Start with Texas-savvy lenders: Frost Bank and RBFCU should be on everyone's shortlist. Compare against national players like U.S. Bank that have built robust Texas compliance operations. And plan ahead—between the waiting period and normal processing time, getting a Texas HELOC from application to funding takes 3–6 weeks.

The no-income-tax advantage is real, but don't forget that Texas's high property taxes eat into your housing budget. Run the full numbers—mortgage, HELOC payment, property taxes, insurance—before deciding how much to borrow.

Related Articles

• [Home [Equity Explained](/blog/home-equity-explained): What It Is and How to Build It](/blog/home-equity-explained)
• Property Taxes Explained: How They Work and How to Reduce Them
• Best HELOC Lenders in 2026 - Compare Rates and Draw Periods