Texas HELOC | Lightning Equity Hybrid HELOC

Pull your Texas equity without touching your first mortgage. Fixed rate per draw. Owner-occupied only, max 80% CLTV under Texas Constitutional rules.

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Important: Texas-specific constitutional overlay

Texas is the only state in the country with home equity lending rules written directly into its constitution. Texas Constitution Section 50(a)(6) (enacted by Texas voters in 1997, amended several times since) governs every home equity loan in the state — regardless of lender. These rules override standard program promises and apply to Lightning Equity in Texas.

In Texas, every Lightning Equity loan must comply with:

• Owner-occupied homestead only. Texas home equity loans can only be made against the borrower’s primary residence (the constitutional homestead). Investment properties, rental properties, and second homes are not eligible.
• 80% combined loan-to-value cap. Texas Constitution caps total CLTV at 80%. Most other states allow up to 85% in qualifying scenarios. The 80% cap is constitutional — no exceptions, no overlay variances.
• Minimum loan amount $35,000 in Texas. Lightning Equity’s standard $25,000 minimum does not apply in Texas — the floor here is $35,000.
• Maximum 10 acres of homestead. Other states allow up to 20 acres. Texas Constitutional homestead is capped at 10 acres for urban homesteads (rural homestead has different rules).
• Fixed-rate only. Texas is on the variable-rate exclusion list for this product. All Texas draws lock a fixed rate.
• 12-day Texas Constitutional notice period. Texas Constitution requires lenders to provide borrowers with mandatory disclosures and wait at least 12 days before closing. That means Texas closings take roughly 15 business days at minimum — not 5. The 5-business-day funding promise that applies in other states does not apply in Texas.
• 2% fee cap. Total closing costs in Texas (excluding bona fide discount points, appraisal, survey, and title insurance) cannot exceed 2% of the loan amount. This is a Texas Constitutional ceiling.
• One home equity loan per 12 months. Texas Constitution allows only one home equity loan to be made on a Texas homestead within any 12-month period. If you closed a Texas home equity loan in the last 12 months, you must wait.
• Closing location restrictions. Texas home equity loans cannot close at the borrower’s home or workplace. Closing must take place at the lender’s office, a title company office, or an attorney’s office.
• Spousal signature required. Texas is a community property and homestead state. If you are married, your spouse must sign the home equity loan documents — regardless of whether they are on the deed.
• Non-recourse against you personally. Texas home equity loans are non-recourse — the lender’s only remedy is the homestead property itself. This is a Texas Constitutional borrower protection.

These rules are not optional and not lender-specific. They apply to every home equity loan made in Texas, by every lender, on every Texas homestead. The 2-minute application will tell you in real time whether your Texas situation qualifies under these constitutional rules.

See If My TX Situation Qualifies

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“Texas has the most extensive constitutional protections for home equity borrowers of any state in the country. Lightning Equity in Texas operates under both PRMG’s program rules and the Texas Constitution’s Section 50(a)(6) requirements.”

Owner-Occupied Homestead Only

Texas home equity loans are constitutional homestead loans. Only owner-occupied primary residences qualify. Second homes, investment properties, rental properties, and properties held in LLCs for non-homestead purposes are not eligible. This is a Texas Constitutional restriction, not a lender preference.

80% Maximum CLTV (Texas Constitutional Cap)

Texas Constitution caps combined loan-to-value at 80% on home equity loans. Other states allow up to 85% in qualifying scenarios. The 80% Texas cap is absolute — no overlay variances. Borrowers must retain at least 20% equity in their Texas homestead after the HELOC.

Minimum Loan Amount $35,000 In Texas

Lightning Equity’s standard minimum is $25,000. In Texas, the minimum is $35,000. Below that amount, the loan does not qualify for this product in Texas.

Maximum 10 Acres

Texas constitutional homestead is generally capped at 10 acres for urban properties (Texas urban homesteads under §50(a)). Rural homestead rules differ. Lightning Equity allows up to 10 acres on Texas properties — versus 20 acres elsewhere.

Fixed Rate Only In Texas

Texas is on the variable-rate exclusion list for this product. Every Texas Lightning Equity draw locks a fixed rate at the time you take it. Your payment never moves on that draw, even if rates climb later.

12-Day Texas Constitutional Notice Period

Texas Constitutional Section 50(a)(6)(M)(i) requires lenders to provide mandatory disclosures at least 12 days before closing. That means Texas closings take roughly 15 business days at minimum — the 12-day notice period plus standard processing and the 3-day federal right of rescission. The 5-business-day funding promise that applies in other states does not apply in Texas.

2% Fee Cap (Texas Constitutional Ceiling)

Texas Constitution caps closing costs at 2% of the loan amount, with limited carve-outs for bona fide discount points, appraisal, survey, and title insurance. This applies to Lightning Equity in Texas. The 2% cap may limit which fees can be rolled into the loan, depending on your specific transaction.

One Home Equity Loan Per 12 Months

Texas Constitution permits only one home equity loan on a Texas homestead within any 12-month period. If you closed a Texas home equity loan within the past 12 months, you must wait. This applies even to refinances of existing Texas home equity loans.

Closing Location: Lender, Title Company, Or Attorney Office

Texas home equity loans cannot close at the borrower’s home, workplace, or other informal location. Closing must occur at the lender’s office, an approved title company office, or an attorney’s office. Many Lightning Equity Texas closings use a Texas title company.

Spousal Signature Required

Texas is a community property and homestead state. Both spouses must sign the Texas home equity loan documents, regardless of whose name is on the deed. The non-borrowing spouse’s credit is not pulled and they are not financially responsible — but their signature is constitutionally required.

Recourse Limited To The Homestead

Texas home equity loans are non-recourse against the borrower personally. The lender’s sole remedy in default is foreclosure on the homestead property. This is a Texas Constitutional borrower protection.

See What I Qualify For In TX

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Keep Your Low Texas First Mortgage Rate

Texas homeowners who bought or refinanced between 2019 and 2022 are sitting on rates that are no longer available. A cash-out refinance throws that rate away. Lightning Equity sits behind your first mortgage as a second lien (under Texas Constitutional rules, this is permitted). You only pay interest on the new money you pull.

Fixed Rate Per Draw

Every Texas Lightning Equity draw locks a fixed rate at the time you take it. Your payment never moves on that draw, even if rates climb later.

Texas Equity Has Grown Substantially

Texas home values appreciated dramatically between 2020 and 2024. Austin and DFW led the gains with multi-year double-digit appreciation. Houston and San Antonio moved alongside. Many Texas homeowners are sitting on hundreds of thousands in untapped equity. Lightning Equity unlocks it without touching your first mortgage.

Fully Automated Texas Application

The 2-minute application uses a soft credit pull (no SSN to start). The system pulls your Texas property value, your credit, and your debt-to-income picture in seconds. Up to 60 personalized loan options come back — line amount, term, rate, and origination fee combinations — so you can pick the one that fits.

Constitutional Borrower Protections

Texas Constitution Section 50(a)(6) provides some of the strongest home equity borrower protections in the country — 80% CLTV cap, 2% fee cap, non-recourse against the borrower, 12-day notice period, and more. Texas borrowers benefit from these protections automatically.

Up To 80% CLTV

On a Texas homestead, you can borrow up to 80% of your home’s appraised value combined with your first mortgage. This is the Texas Constitutional cap. Most equity products in other states can go higher, but Texas is uniformly capped at 80% by constitutional law.

“Asking “what’s the Texas HELOC rate” is like asking a mechanic to quote a repair before they’ve looked at the car. Any number is a guess until your file is in front of us.”

Apply In Minutes

The application is fully online. A soft credit pull runs first — your score is not affected. The system pulls your Texas property value, lien position, and an automated valuation. You see a real loan amount and rate range in minutes — approval in as few as 5 minutes¹. If your situation doesn’t fit the Texas Constitutional rules (non-homestead, above 80% CLTV, below $35K, etc.), the system tells you upfront.

Receive Texas Constitutional Disclosures

Texas Constitution requires lenders to provide mandatory disclosures including the Notice Concerning Extensions of Credit. The 12-day notice period begins on the day you receive these disclosures.

Verify Income Automatically

Most income verifies through linked bank accounts, payroll connections, or tax-return retrieval. If you are married, your spouse will need to be added as an additional signer (community property and homestead state). Their credit will not be pulled.

Lock Your Rate

Once underwriting clears, you lock the fixed rate on your initial draw. Texas is fixed-rate only, so there’s no variable option to choose.

Wait The 12-Day Texas Notice Period

Texas Constitution requires a minimum 12-day wait between receipt of disclosures and closing. This protects borrowers and allows time to review the terms thoroughly. Other states do not have this requirement; Texas does.

Close At A Texas Title Company Or Attorney Office

Texas home equity loans cannot close at your home or workplace. Closing must occur at the lender’s office, a Texas title company office, or an attorney’s office. Both spouses must sign if married.

Federal 3-Day Rescission Period

After closing, the 3-business-day federal right of rescission applies. You can cancel within those 3 business days.

Fund And Redraw

Funds release after rescission expires — typically 15 business days from application total. As you pay down principal during the draw period, that balance becomes available again. Each new draw locks its own fixed rate at the time you take it. The rate on any additional draw is set on the date of the draw, based on the Prime Rate (published in the Wall Street Journal) plus a fixed margin. The fixed rate on an additional draw may be higher than the fixed rate on the initial draw³.

Requirement	Texas Standard
Occupancy	Owner-occupied homestead only. No investment, no rentals, no second homes. (Texas Constitutional requirement)
Maximum CLTV	80%. Texas Constitutional cap. No exceptions, no overlay variances.
Minimum Loan Amount	$35,000 in Texas (vs $25,000 standard in other states).
Maximum Loan Amount	$750,000.
Maximum Acreage	10 acres. Texas Constitutional homestead cap (vs 20 acres in other states).
Rate Type	Fixed only. Variable rate is not available in Texas (Texas is on the program’s variable-rate exclusion list).
Closing Timeline	~15 business days minimum. Texas Constitutional 12-day notice period plus 3-day federal rescission. The 5-day funding promise does not apply in Texas.
Fee Cap	2% of loan amount (excluding bona fide discount points, appraisal, survey, title insurance). Texas Constitutional cap.
Loan Frequency	One Texas home equity loan per 12 months. Texas Constitutional requirement.
Minimum Credit Score	640 standard. 760 for loans over $400,000 at higher LTVs. 780+ unlocks the highest tiers.
Maximum DTI	50% on single-family. 45% on 2-to-4 unit.
Property Types	Single-family, 2-to-4 unit, condo, townhome, PUD — owner-occupied Texas homestead only.
Term Options	10, 15, 20, or 30 years. Draw periods 3 to 5 years.
Appraisal	Automated valuation in most cases. Full appraisal required on loans over $400,000.
LLC Ownership	Not applicable (owner-occupied homestead only).
Spousal Signature	Required if married. Texas community property + homestead state. Non-borrowing spouse signs but credit is not pulled.
Closing Location	Lender’s office, Texas title company, or attorney’s office. Closing at borrower’s home or workplace is prohibited by Texas Constitution.
Recourse	Non-recourse against the borrower personally. Texas Constitution limits recourse to the homestead property.
Coverage	Statewide Texas — all 254 counties.
Prepayment Penalty	None.

DFW & Austin Home Renovations

Plano, Frisco, McKinney, Round Rock, and Cedar Park homeowners use HELOCs to fund renovations — kitchen and bath updates, additions, pool installations, and major improvements. Texas equity often supports six-figure renovations comfortably under the 80% CLTV cap.

Houston Storm & Hurricane Hardening

Houston, the Gulf Coast, and East Texas face real hurricane and severe storm risk — Hurricane Harvey memory still drives investment in storm protection. Impact windows, roof tie-downs, generator installation, foundation elevation, and storm shutters protect homes and can reduce flood and homeowners insurance premiums.

Texas Military Family Renovations

Texas hosts an extraordinary military presence: Joint Base San Antonio, Fort Cavazos, Fort Bliss, Sheppard AFB, Goodfellow, Laughlin, Dyess, NAS Corpus Christi, NAS Kingsville, Ellington Field. HELOCs help with pre-PCS renovations, post-deployment repairs, and bridge financing for military relocations. The fully automated application fits military timelines (within Texas Constitutional rules).

Texas Property Tax Cash Flow Management

Texas has no state income tax, but property taxes are among the highest in the country. Some borrowers use a Texas HELOC to spread a large property tax bill into a longer fixed-rate payoff, easing cash flow without selling equity or running up credit cards.

Tornado & Severe Weather Hardening

North Texas, Central Texas, and the Panhandle face significant tornado and severe weather risk. Safe rooms, reinforced garage doors, impact windows, and roof tie-downs protect homes and can reduce insurance premiums.

Solar Panel Installation

Texas has excellent sun exposure plus federal solar tax credits. A HELOC funds the install. Hot Texas summers drive substantial AC-load offsets, making solar payback faster here than in cooler states. The Texas electricity market also rewards homeowner solar production.

Older Home Renovations

Texas has substantial historic housing stock — Houston’s Heights and Montrose, Dallas’ Highland Park and Lakewood, San Antonio’s King William and Monte Vista, Austin’s Hyde Park and Travis Heights. Kitchen, bath, electrical, plumbing, and HVAC work all retain value here. HELOC interest used for home improvements may be tax-deductible (talk to your tax advisor).

College Tuition

University of Texas (Austin), Texas A&M, Rice, Baylor, SMU, TCU, UT Dallas, UT San Antonio, UT Houston, Texas Tech — a HELOC can cover tuition or housing costs with a lower fixed rate than most private student loans.

Permian Basin Energy Industry Cash-Out

Midland, Odessa, and the broader Permian Basin oil and gas industry employs significant numbers. Industry professionals with appreciation tied to oil-patch growth use HELOC equity for diversification, business investment, or major purchases.

Hill Country Property Improvements

Fredericksburg, Boerne, Wimberley, and the Hill Country attract second-home buyers (when this product applies on their primary homestead elsewhere). For Hill Country primary residents, HELOC funds support wine country property improvements and additions.

Debt Consolidation

Replace high-rate credit cards (often 22%+) with a single fixed-rate HELOC payment. Many Texas borrowers save thousands a year in interest this way. Subject to Texas 2% fee cap on Texas home equity loans.

Factor	TX Lightning Equity HELOC	TX Cash-Out Refinance
Touches first mortgage?	No — your first mortgage stays exactly as it is.	Yes — replaces your first mortgage at today’s rate.
Closing time	~15 business days (Texas Constitutional 12-day notice + processing).	Typically 30 to 45 days (also subject to Texas 12-day notice).
Out-of-pocket cost	Lower in most cases. Subject to Texas 2% fee cap.	Typically 2% to 5% of total loan amount.
Maximum CLTV	80% (Texas Constitutional cap).	80% (Texas Constitutional cap on Texas home equity refis).
Rate type	Fixed per draw. Redraw flexibility.	Fixed for life of loan. No redraw.
Best for Texas homeowners when	Your existing first-mortgage rate is low and you want capital fast (within Texas constitutional timeline).	Today’s rates are lower than your existing rate.
Re-access funds later	Yes — redraw paid-down balance during draw period.	No — single lump sum.
Texas Constitutional 50(a)(6) applies?	Yes — all rules apply.	Yes if it’s a Texas cash-out refinance under 50(a)(6); some refis (rate-and-term) are not 50(a)(6).

Myth: Texas HELOCs can close in 5 days like other states.

They cannot. Texas Constitution Section 50(a)(6)(M)(i) requires a minimum 12-day notice period from disclosure receipt to closing. Adding standard processing time and the 3-day federal rescission, Texas closings take roughly 15 business days. This is constitutional, not lender-specific.

Myth: I can use a Texas HELOC on my rental property in Texas.

You cannot. Texas Constitutional home equity loans apply only to the owner-occupied homestead. Rental properties, investment properties, and second homes are not eligible under Texas Constitutional rules. Lightning Equity follows the constitutional rule.

Myth: I can borrow up to 85% LTV like other states.

Not in Texas. The Texas Constitutional cap is 80% CLTV. No exceptions. Every Texas HELOC, from every lender, observes this 80% cap.

Myth: I can close my Texas HELOC at home for convenience.

No. Texas Constitution prohibits home equity loans from closing at the borrower’s home or workplace. Closing must occur at the lender’s office, an approved title company office, or an attorney’s office.

Myth: Texas HELOCs can be variable rate.

Not on Lightning Equity. Texas is on the program’s variable-rate exclusion list. Every Texas Lightning Equity draw is fixed-rate.

Myth: I can get multiple Texas HELOCs in a year.

You cannot. Texas Constitution permits only one home equity loan per 12-month period on a Texas homestead. This applies to original loans and to refinances of existing Texas home equity loans.

Myth: My spouse doesn’t need to sign because we have a prenup or the home is in my name only.

Texas community property and homestead law requires both spouses to sign Texas home equity loan documents. Prenuptial agreements do not change this constitutional requirement. The non-borrowing spouse’s credit is not pulled and they are not financially responsible — but their signature is required.

Myth: Texas closing costs can be rolled into the loan freely.

Texas Constitution caps total closing costs at 2% of the loan amount (with carve-outs for bona fide discount points, appraisal, survey, and title insurance). The 2% cap may limit which fees can be rolled in or financed.

Can I get a HELOC in Texas?

Yes — if your Texas property is your owner-occupied primary residence (constitutional homestead). The Lightning Equity Hybrid HELOC is available statewide in Texas, subject to Texas Constitution Section 50(a)(6) rules: 80% maximum CLTV, $35,000 minimum loan amount, maximum 10 acres, fixed-rate only, 12-day notice period, 2% fee cap, one home equity loan per 12 months.

Why does Texas have so many extra rules compared to other states?

Texas voters amended the Texas Constitution in 1997 to permit home equity lending, but built in extensive borrower protections. Texas Constitution Section 50(a)(6) has been amended several times since but remains the most extensive constitutional home equity framework in the country. These rules apply to every lender and every home equity loan in Texas.

How fast can I close a Texas HELOC?

Roughly 15 business days minimum. Texas Constitution requires a 12-day notice period from disclosure receipt to closing, plus standard processing and the 3-day federal right of rescission. The 5-business-day funding promise that applies in other states does not apply in Texas. This is constitutional, not lender-specific.

What credit score do I need for a Texas HELOC?

The minimum is 640. Higher scores unlock higher loan amounts and lower rates. A 740+ score opens the higher-LTV tiers within the Texas 80% constitutional cap. A 780+ score opens lines above $400,000.

Will a Texas HELOC affect my first mortgage rate?

No. A Lightning Equity HELOC in Texas sits behind your first mortgage as a second lien (Texas Constitution permits this). Your existing first mortgage stays exactly as it is — same rate, same payment, same lender. This is the main reason Texas homeowners choose a HELOC over a Texas cash-out refinance.

How much equity do I need for a Texas HELOC?

You need to keep at least 20% equity in your Texas homestead after the HELOC is added. Texas Constitutional cap is 80% CLTV — meaning the combined balance of your first mortgage plus the HELOC cannot exceed 80% of your home’s appraised value.

Can I get a HELOC on my Texas rental property?

No. Texas Constitutional home equity loans apply only to owner-occupied primary residences (homesteads). Rental properties, investment properties, and second homes are not eligible under Texas law. For a Texas investment property cash-out, you would need a different program (DSCR, conventional investment property cash-out, etc.).

Is variable rate available for Texas HELOCs?

No. Texas is on the variable-rate exclusion list for Lightning Equity. Every Texas draw locks a fixed rate. Most Texas homeowners pick fixed anyway, so this rarely matters in practice.

Does my spouse have to sign the Texas HELOC documents?

Yes, if you are married. Texas is a community property and homestead state. Both spouses must sign Texas home equity loan documents, regardless of whose name is on the deed and regardless of any prenuptial agreement. The non-borrowing spouse’s credit is not pulled and they are not financially responsible — but their signature is constitutionally required.

Where can I close my Texas HELOC?

Closing must occur at the lender’s office, an approved Texas title company office, or an attorney’s office. Texas Constitution prohibits closings at the borrower’s home or workplace. Many Lightning Equity Texas closings happen at a Texas title company.

What is the 2% Texas fee cap?

Texas Constitution caps total closing costs on a Texas home equity loan at 2% of the loan amount, with carve-outs for bona fide discount points, appraisal, survey, and title insurance. This is a Texas Constitutional requirement that applies to every lender. The 2% cap may limit which fees can be rolled into the loan.

Can I get more than one Texas HELOC per year?

No. Texas Constitution permits only one Texas home equity loan to be made on a Texas homestead within any 12-month period. This applies to original loans and to refinances of existing Texas home equity loans. If you closed a Texas home equity loan within the past 12 months, you must wait.

Is HELOC interest tax-deductible in Texas?

Maybe. Under current federal tax law, home equity loan interest may be deductible when funds are used to buy, build, or substantially improve the home securing the loan. Interest used for other purposes (debt consolidation, personal expenses) is usually not deductible. Texas has no state income tax, so Texas state tax considerations don’t apply. Talk to a qualified tax advisor.

Have more questions about the Lightning Equity Hybrid HELOC? The full FAQ covers 139 of them — rates, draws, credit, equity, fast-HELOC mechanics, the application process, and more.

Read the Full HELOC FAQ →

Lightning Equity Hybrid HELOC

Full pillar overview — product structure, terms, draw periods, and use cases nationwide. Texas operates under the Texas Constitutional rules described on this page.

HELOC FAQ (139 Questions)

Every common question about the Lightning Equity Hybrid HELOC — rates, draws, credit, equity, application process, fast-HELOC mechanics, and more. Texas Constitutional rules are covered above.

Closed-End Second Mortgage

Note: Texas closed-end second mortgages have their own state-specific rules and Texas constitutional considerations. Confirm eligibility for your scenario.

All Texas Loan Options

VA, FHA, USDA, Conventional, Non-QM, DSCR, Bank Statement, construction, and second-lien programs. Texas borrowers needing investment property financing should look at DSCR or conventional investment property cash-out (Texas home equity loans cannot be used on rentals).

About J.D. Peck

25+ years originating. 3,100+ closed loans. Scotsman Guide Top Originator 2026. NMLS #314883.

Soft credit pull. Approval in as few as 5 minutes¹. Up to 60 personalized loan options. Funding in roughly 15 business days (Texas Constitutional 12-day notice period applies). Statewide Texas coverage.

Start Your HELOC Application

Important Notes & Disclosures

¹ Approval in as few as 5 minutes. Approval is ultimately subject to verification of income, employment, and property condition (which may include a property condition report). Pre-qualification uses a soft credit pull and does not affect your credit score. Submitting a full application requires a hard credit pull that may affect your credit score.

² Funding timeline for Texas HELOCs is approximately 15 business days due to the Texas Constitution §50(a)(6) requirement for a 12-day notice period between disclosure delivery and closing. Five-business-day timelines do not apply to Texas-secured loans. Closing format and county recording systems may further extend the timeline.

³ The Lightning Equity Hybrid HELOC is an open-end product where the full loan amount (minus the origination fee) is 100% drawn at origination at a fixed rate. Additional draws are also fixed-rate, but the rate on each additional draw is set on the draw date based on the Prime Rate (published in the Wall Street Journal) for the calendar month preceding the draw, plus a fixed margin. Accordingly, the fixed rate on any additional draw may be higher than the fixed rate on the initial draw.

Written by J.D. Peck, NMLS #314883, Area Manager and Mortgage Loan Originator at Paramount Residential Mortgage Group (PRMG), NMLS #75243. 25+ years in mortgage lending, 3,100+ loans closed, Scotsman Guide Top Originator 2026. Texas Constitutional rules described on this page reference Texas Constitution Section 50(a)(6) and Lightning Equity Hybrid HELOC Product Profile (revised 2/26/2026) and Expanded Guidelines (revised 3/12/2026). Texas-specific overlays are matrix-confirmed: owner-occupied only, max 80% CLTV, $35,000 minimum loan, max 10 acres, fixed-rate only, plus all Texas Constitutional Section 50(a)(6) requirements. Guidelines subject to change. This page is informational and not legal advice. Lending in 49 states. New York excluded. PRMG is licensed in Texas by the Texas Department of Savings and Mortgage Lending and the Texas Office of Consumer Credit Commissioner.