Texas 50(a)(6) Cash-Out Refinance Rules: The Plain-English 2026 Guide
A Texas 50(a)(6) loan — often called a “Texas A6” or Texas cash-out refinance — is the only way to pull cash out of your primary home in Texas, and it comes with the strictest homeowner protections in the country: an 80% loan-to-value cap, a 2% lender-fee cap, a 12-day waiting period, a 3-day right to cancel after closing, and a one-per-12-months limit. Every one of those rules is written directly into Article XVI, Section 50 of the Texas Constitution, and this guide walks through each in plain English — including what veterans can and can’t do here.
Educational content only — not legal advice. Confirm current requirements with your lender or an attorney before closing.
What is a Texas 50(a)(6) loan?
A 50(a)(6) loan is any loan that pulls equity out of your Texas homestead — a cash-out refinance or a home equity loan on your primary residence. It’s named for the section of the Texas Constitution that authorizes it, and that section, not federal guidelines, sets the limits: 80% max LTV, 2% lender-fee cap, 12-day notice, and one such loan per homestead per 12 months.
Key takeaways
- 80% LTV cap. You can borrow up to 80% of appraised value across all liens — you always keep at least 20% equity, a constitutional floor (§50(a)(6)(B)).
- 2% lender-fee cap. Lender fees can’t exceed 2% of the loan; the appraisal, survey, base title premium, and title exam are excluded.
- Two waiting periods. No closing before the 12th day after application or the required notice, and a 3-day right to cancel after closing before funds disburse.
- Once per 12 months. One 50(a)(6) closing per homestead per 12 months, and only one 50(a)(6) lien at a time.
- Homestead only. Primary residences only — and no VA or FHA cash-out exists on a Texas homestead; veterans use a conventional 50(a)(6) or the VA IRRRL.
- There’s an exit. Since 2018, Section 50(f)(2) lets you refinance out of the 50(a)(6) structure once four conditions are met.
What Is a Texas 50(a)(6) Loan?
Texas is unique here. Until 1997, home equity lending was essentially prohibited in Texas; when voters allowed it, they wrote the guardrails into the Constitution itself. That’s why these rules feel stricter than anywhere else — and why they only change by statewide constitutional amendment. The last substantive change was Proposition 2, approved November 2017 and effective January 1, 2018. Nothing in the November 2025 amendment cycle touched these rules. Home equity lenders in Texas are regulated by the Texas Department of Savings and Mortgage Lending.
How Much Cash Can You Take Out of Your Texas Home?
You can borrow up to 80% of your home’s appraised fair market value, counting every lien on the property — meaning you always keep at least 20% equity. Take 80% of your home’s value, subtract your current mortgage balance and closing costs, and what’s left is your maximum available cash. There are no exceptions to the 80% cap under Section 50(a)(6).
The 80% Math on a Real Example
On a $400,000 home: 80% is $320,000. If you owe $200,000, your new loan can be up to $320,000 — roughly $120,000 available before closing costs. In most other states nothing guarantees you keep a 20% cushion; in Texas it’s a constitutional floor (§50(a)(6)(B)).
Two more protections ride along: a 50(a)(6) loan can never carry a prepayment penalty (§50(a)(6)(G)), and it’s non-recourse — absent fraud, the lender’s only remedy is the home itself, not your other assets (§50(a)(6)(C)).
What Is the 2% Fee Cap on a Texas Cash-Out Refinance?
Fees the lender charges — origination, underwriting, processing, and similar costs — can’t exceed 2% of the loan amount. Four third-party items are excluded from the cap: the appraisal, a survey by a licensed surveyor, the base title insurance premium, and the title examination report. Bona fide discount points you choose to buy down your rate count as interest, not fees.
The cap was 3% until the 2017 amendment lowered it to 2% for loans closed on or after January 1, 2018, while moving those four big third-party costs outside the cap. Practical effect: your lender-side costs are predictable, and when we shop your file to multiple lenders, the 2% ceiling applies no matter which one wins your business.
How Long Does a Texas Cash-Out Refinance Take? The 12-Day Rule and 3-Day Rescission
Two constitutional waiting periods apply. First, your loan cannot close before the 12th day after the later of your application or the day the lender gives you the required consumer disclosure notice. Second, after closing, you have 3 days to cancel for any reason — the loan can’t fund until that window passes.
The 12-Day Consumer Disclosure Notice
When you apply, the lender must deliver a written notice summarizing your constitutional rights (the “12-day letter”). The clock runs from whichever comes later — the application or the notice — so a late notice restarts the wait (§50(a)(6)(M)(i)). If you’re married, both spouses sign. We use those 12 days productively: documents, appraisal, and lender shopping all happen inside the window, so the rule rarely adds real time to your closing.
The Final-Terms Preview and the 3-Day Right of Rescission
At least one business day before closing, you must receive an itemized disclosure of your final loan terms (§50(a)(6)(M)(ii)) — no surprise numbers at the table. Then, after you sign, Texas gives you and your spouse 3 days to rescind the loan entirely, no penalty and no questions asked; Sundays and federal holidays don’t count toward the three days (§50(a)(6)(Q)(viii); 7 TAC §153.25). Your cash disburses once the rescission period expires.
How Often Can You Do a Cash-Out Refinance in Texas?
Once every 12 months per homestead. A new 50(a)(6) loan cannot close before the first anniversary of the closing date of any previous 50(a)(6) loan on the same property (§50(a)(6)(M)(iii)). Separately, you can have only one 50(a)(6) lien on your homestead at a time (§50(a)(6)(K)) — you can’t stack a home equity loan on top of an existing Texas cash-out.
Planning note: the one-year clock also gates your exit. Refinancing an existing equity loan — even with no new cash — can’t close before that first anniversary, whether you refinance into a new 50(a)(6) or convert to a regular loan under 50(f)(2). If you might want equity twice in two years, structure the first loan with that timeline in mind — this is exactly the strategy conversation we have before anyone runs credit.
Which Homes Qualify for a Texas 50(a)(6) Loan?
Only your homestead — the primary residence you own and occupy in Texas. Second homes and investment properties are not eligible, and a 50(a)(6) loan can’t be used to purchase a home. Since January 1, 2018, homes on land with an agricultural exemption DO qualify — the old ag-land prohibition was repealed by the 2017 amendment.
Details worth knowing:
- Homestead means the home you live in, up to 10 acres in a city or up to 100 acres rurally (200 for a family).
- Agricultural exemption: before 2018, an ag-exempt homestead (other than dairy) couldn’t get a home equity loan at all. That restriction is gone. Some older lender guides still say otherwise; they’re out of date.
- Investment property? Section 50(a)(6) doesn’t apply to rentals — none of these protections, but none of these restrictions either. Investors use DSCR or other investor products.
Where Do You Close — and Does Your Spouse Have to Sign?
A 50(a)(6) loan must close in person at the office of the lender, an attorney, or a title company — never at your kitchen table (§50(a)(6)(N)). If you’re married, your spouse must consent to the lien even if they’re not on the loan, because Texas homestead protection covers the household. The spousal-consent requirement is the single most common surprise for borrowers new to Texas lending; we flag it in the first conversation.
Texas 50(a)(6) Rules at a Glance
| Rule | What It Means | Where It’s Written |
|---|---|---|
| Maximum LTV | 80% of appraised value, all liens combined | §50(a)(6)(B) |
| Lender fee cap | 2% of principal; appraisal, survey, base title premium, title exam excluded | §50(a)(6)(E) |
| Waiting period | No closing before the 12th day after application or disclosure, whichever is later | §50(a)(6)(M)(i) |
| Final terms preview | Itemized disclosure ≥1 business day before closing | §50(a)(6)(M)(ii) |
| Right of rescission | 3 days to cancel after closing (excl. Sundays/federal holidays) | §50(a)(6)(Q)(viii) |
| Frequency | One 50(a)(6) closing per homestead per 12 months | §50(a)(6)(M)(iii) |
| One at a time | Only one 50(a)(6) lien on the homestead at once | §50(a)(6)(K) |
| Eligible property | Texas homestead only; ag-exempt land OK since 2018 | §50(a)(6)(H)–(I) |
| Closing location | Office of lender, attorney, or title company | §50(a)(6)(N) |
| Prepayment penalty | Prohibited | §50(a)(6)(G) |
| Recourse | Non-recourse absent fraud | §50(a)(6)(C) |
Source: Texas Constitution, Article XVI, Section 50. Rules current as of July 2026; they change only by constitutional amendment.
Thinking About Tapping Your Texas Equity?
Whether it’s a conventional 50(a)(6) cash-out, a home equity loan, or a VA IRRRL, a fellow veteran will walk you through what’s actually allowed in Texas — no upfront credit check, no obligation, and we shop multiple lenders so they compete for your business.
LET’S TALKCan You Do a VA or FHA Cash-Out Refinance in Texas?
No. The VA does not guarantee — and FHA does not insure — loans made under Section 50(a)(6), so a VA or FHA cash-out refinance is not available on a Texas homestead. To pull equity from your primary home in Texas, the path is a conventional 50(a)(6) loan. Rate-lowering government refinances with no cash out — the VA IRRRL and FHA Streamline — remain fully available.
What Texas Veterans Can Do Instead
- VA IRRRL (streamline refinance) — fully available. Lowers the rate on an existing VA loan with minimal paperwork and no cash out. Details on the Texas VA IRRRL page.
- Conventional 50(a)(6) cash-out — open to everyone. Same 80% cap and rules above. See how a cash-out refinance in Texas works.
- 50(a)(6) home equity loan behind your VA first mortgage. If your existing first lien is a VA purchase loan (not a 50(a)(6)), a separate home equity loan can sit in second position as long as combined liens stay within 80% — preserving the VA rate you already have. More on Texas home equity loans.
As a retired Army Captain, Adam will tell you straight when a product doesn’t exist in Texas rather than walking you down a path that dead-ends in underwriting. Lender guideline reference: Fannie Mae Selling Guide B5-4.1-02, Texas Section 50(a)(6) Loan Eligibility.
How Does a Texas 50(a)(6) Cash-Out Work, Step by Step?
From first call to funded cash, expect roughly 30–40 days — the 12-day notice and 3-day rescission are built into every lender’s timeline, so they rarely add delay. No upfront credit check is needed to start the conversation.
- Strategy Conversation We start with the goal and confirm which tool fits: a 50(a)(6) cash-out, a second-lien home equity loan that preserves your current first-mortgage rate, or (for veterans) an IRRRL. No upfront credit check.
- Application and the 12-Day Notice You apply, receive the consumer disclosure notice, and the constitutional clock starts. We spend the window gathering documents and ordering the appraisal.
- Appraisal and the 80% Math The appraisal sets fair market value; maximum loan = 80% of value. This is when we shop your file to multiple lenders so they compete — the 2% fee cap applies regardless of which lender wins.
- Underwriting Your file is checked against every 50(a)(6) requirement so there are no compliance surprises at the table.
- Closing, Rescission, and Funding You close in person, having received final itemized terms at least one business day earlier. After the 3-day rescission window passes, your cash disburses.
Common Texas 50(a)(6) Myths
Myth: “Once a 50(a)(6), always a 50(a)(6).”
Not anymore — with conditions. Since January 1, 2018, Section 50(f)(2) lets you refinance a Texas home equity loan into a regular rate-and-term loan, permanently releasing the home from the equity-loan rules, if four requirements are met: one year has passed, no new cash is advanced, combined liens stay at or below 80% LTV, and you receive the required 50(f)(2) notice on time.
The timing details matter, because this is where conversions fail:
- One-year seasoning: the new loan can’t close before the first anniversary of the equity loan’s closing.
- No cash back beyond closing costs rolled into the loan.
- 80% LTV on all combined liens.
- The 50(f)(2) disclosure must be delivered within 3 business days of application AND at least 12 days before closing; you’ll sign an affidavit at closing confirming the requirements were met.
Practical takeaway: if you took a Texas cash-out years ago, you may be able to refinance out of the 50(a)(6) structure entirely — often with better pricing, since the loan is no longer a Texas A6 in lenders’ eyes. Start on the Texas refinance page.
Texas 50(a)(6) FAQs
How much cash can I take out of my Texas home?
Up to 80% of your home’s appraised value across all liens, minus your current mortgage balance and closing costs. On a $400,000 home with a $200,000 balance, 80% is $320,000 — roughly $120,000 available before costs. The 80% cap is set by the Texas Constitution and no lender can exceed it on a homestead.
Can I do a VA cash-out refinance in Texas?
No. The VA does not guarantee loans made under Texas Section 50(a)(6), so a VA cash-out refinance is not available on a Texas homestead. Veterans pull equity with a conventional 50(a)(6) cash-out or a second-lien home equity loan; the VA IRRRL streamline refinance is fully available in Texas.
What is the 12-day rule in a Texas cash-out refinance?
Your loan cannot close before the 12th day after the later of your loan application or the day the lender delivers the required consumer disclosure notice. You and your spouse sign and date the notice. It is a constitutional cooling-off period, and processing normally continues inside the window.
How often can I do a cash-out refinance in Texas?
Once every 12 months per homestead, measured from your last 50(a)(6) closing date, and only one 50(a)(6) lien can exist on the property at a time. Even a no-cash refinance of an existing equity loan cannot close before that first anniversary.
Can I refinance out of a 50(a)(6) loan later?
Often yes. Under Section 50(f)(2), effective January 1, 2018, a Texas home equity loan can be refinanced into a regular rate-and-term loan if at least one year has passed, no new cash is taken, combined liens stay at or below 80% LTV, and the required 50(f)(2) notice is delivered on time.
What fees count toward the 2% cap?
Lender-charged fees such as origination, underwriting, processing, and credit report fees. Excluded are the third-party appraisal, survey, base title insurance premium, and title examination report. Bona fide discount points used to lower the rate are treated as interest, not fees.
Do both spouses have to sign a Texas home equity loan?
Yes. If you are married, your spouse must consent to the lien even if only one spouse is on the loan, because Texas homestead protection covers the household. Both spouses also sign the 12-day notice and hold the 3-day right of rescission after closing.
Can I get a Texas cash-out refinance on land with an agricultural exemption?
Yes, since January 1, 2018. The 2017 constitutional amendment repealed the prior rule blocking home equity loans on agricultural-exemption homesteads. The standard 50(a)(6) rules — 80% LTV, 2% fee cap, 12-day notice — now apply to ag-exempt homesteads like any other.
Adam Bartling
Loan Officer · NMLS# 2213358 · Retired U.S. Army Captain
Adam served 22 years in the U.S. Army and retired as a Captain before becoming an independent Texas mortgage broker. His approach is education first: no pressure, no upfront credit check, and plain-English answers about what Texas law actually allows. Because he’s a broker, he shops multiple lenders so they compete for your business — and his goal is to be your lender for life, not just for one closing. More about Adam.
Start the Conversation — No Credit Check
Call (713) 301-0007 — calls answered until 8pm — or start the conversation online. No upfront credit check, no obligation. Serving all 254 Texas counties.
LET’S TALKAdam Bartling | Texas Mortgage Broker · Loan Officer NMLS# 2213358 · Serving Texas · Equal Housing Lender