Texas HELOC Guide: Understanding the Unique Rules & Requirements (2026)

Meta Title: Texas HELOC Guide: 80% LTV Rule, 12-Day Wait & More (2026) Meta Description: Texas has the strictest HELOC laws in America. Understand the 80% LTV cap, 12-day waiting period, and 3% fee limit before you apply. Keywords: texas heloc, texas home equity loan rules, texas heloc restrictions, texas 80% ltv rule

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Texas has the strictest HELOC laws in America.

These rules are written into the Texas Constitution. They can't be waived, negotiated, or worked around. They exist to protect homeowners — but they also add complexity.

If you're getting a HELOC in Texas, you need to understand these rules. Let's break down every one.

What Makes Texas HELOCs Different

The 80% LTV Cap (Constitutional Limit)

Texas law caps ALL home equity borrowing at 80% of your home's value.

This isn't a lender guideline. It's in the Texas Constitution, Article XVI, Section 50.

What it means:

• Your first mortgage PLUS your HELOC cannot exceed 80% of home value
• This is stricter than most states (which allow 85-90% CLTV)

Example calculation:

If your mortgage is already at 80% LTV, you cannot get a Texas HELOC at all — even with perfect credit.

The 12-Day Waiting Period

In Texas, you cannot close on a HELOC until at least 12 days after you submit your application.

Why it exists: To prevent high-pressure sales tactics and give homeowners time to reconsider.

What it means for you: Even if you're pre-approved and ready to go, you're waiting. There's no "urgent" option.

The timeline:

• Day 1: Application submitted
• Days 2-11: Processing, appraisal, underwriting
• Day 12: Earliest possible closing date

3-Day Right of Rescission

After you close, you have 3 business days to change your mind and cancel the HELOC with no penalty.

During these 3 days:

• Funds are NOT disbursed
• You can walk away completely
• Lender cannot pressure you

What it means: Your actual access to funds comes on Day 15-16 at earliest.

The 3% Fee Cap

Texas caps HELOC fees at 3% of the loan amount.

Included in the cap:

• Origination fees
• Appraisal fees
• Title insurance
• Closing costs

Excluded from the cap:

• Property insurance premiums
• Escrow deposits
• Interest

Why this matters: In other states, HELOC fees can exceed 3-4%. Texas protects you from fee gouging.

One Home Equity Product Per Year

In Texas, you can only refinance or take out a new home equity product once every 12 months.

"Home equity product" includes:

• HELOC
• Home equity loan
• Cash-out refinance

What it means: Choose carefully. If you get a HELOC and rates drop six months later, you can't easily switch.

Texas HELOC Requirements

Beyond the constitutional rules, standard requirements apply:

*The Texas constitutional protections apply ONLY to your homestead (primary residence). Investment properties follow standard rules.

2018 Changes That Helped (Proposition 2)

In 2018, Texas voters approved changes that made HELOCs more accessible:

• Agricultural property now eligible — Previously excluded
• Rural homesteads included — Expanded coverage
• Easier refinancing — Can convert HELOC to non-home-equity loan
• HELOC to fixed-rate conversion — Simpler process

The 80% cap and 12-day wait remain unchanged — they're constitutional.

Texas HELOC Timeline (What to Actually Expect)

Best case: 16 days from application to cash. Typical case: 3-4 weeks. Complex situations: 4-6 weeks.

If you need money faster, Texas HELOCs aren't the answer. Plan ahead.

Best Texas HELOC Lenders

These lenders understand Texas rules and offer competitive rates:

Pro tip: Texas credit unions often have the best rates and understand the local rules better than national banks.

Texas HELOC for Investment Properties

Here's where it gets interesting: Texas constitutional protections only apply to your homestead.

If you're getting a HELOC on a rental property, second home, or investment property in Texas:

• 80% cap does NOT apply (can go to 85-90% LTV)
• 12-day waiting period does NOT apply
• 3% fee cap does NOT apply
• One-per-year rule does NOT apply

Investment property HELOCs follow standard national rules. Only your primary residence gets the Texas treatment.

How to Calculate Your Texas HELOC Amount

Step 1: Get your home's current value (appraisal or estimate)

Step 2: Multiply by 80% (Texas constitutional maximum)

Step 3: Subtract your current mortgage balance

Step 4: The result is your maximum HELOC amount

Example:

Home value:           $450,000
× 80% cap:            $360,000
- Current mortgage:   $280,000
= Max HELOC:          $80,000

Some lenders may offer less than this maximum based on their own risk assessment.

Texas HELOC Tax Implications

No state income tax — Texas doesn't have one. The federal deduction is your only tax benefit.

Federal deduction — HELOC interest is deductible IF used for home improvements (up to $750K total mortgage debt).

What this means: You don't get the "double deduction" benefit that high-tax states like California offer. But you're not paying state income tax in the first place, so it evens out.

Common Questions About Texas HELOCs

Why does Texas have these rules? Historical protection against predatory lending. Texas has always been protective of homesteads — these rules prevent aggressive lenders from putting families at risk of losing their homes.

Can I get a HELOC faster than 12 days? No. The waiting period is constitutional. No lender can bypass it.

Can the 80% rule be waived? No. It's in the Texas Constitution. Only a constitutional amendment (requiring voter approval) could change it.

What if I'm at exactly 80% LTV? You cannot get a Texas HELOC. You'd need to pay down your mortgage first.

Can I get a Texas HELOC on a condo? Yes, if it's your primary residence. Condo rules apply (lender reviews HOA finances).

What happens if Texas home prices drop? Your HELOC doesn't automatically become due. But if you try to refinance or modify, the 80% cap applies to current value.

The Bottom Line

Texas HELOC rules protect you — but they also limit flexibility.

Pros of Texas rules:

• 3% fee cap saves money
• Waiting period prevents pressure decisions
• 80% cap prevents over-leveraging

Cons of Texas rules:

• Less borrowing capacity than other states
• Longer timeline
• Less flexibility to change products

If you're a Texas homeowner with equity to tap, a HELOC can still be excellent. Just go in with realistic expectations about timeline and amount.

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Next Steps

Calculate your Texas HELOC capacity with our equity calculator — it accounts for the 80% cap automatically. Then compare rates from Texas lenders who understand the rules.

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Last updated: February 2026. Texas home equity laws are constitutional and change rarely. Verify current rates with individual lenders.