If you own a home in Texas and want to pull cash out of your equity, you’ll run into a set of rules that exist nowhere else in the country. They live in the Texas Constitution — Article XVI, Section 50(a)(6) — which is why lenders just call these loans “Texas 50(a)(6)” or “Texas A6” loans.
Most of the confusion I see comes from people reading generic cash-out articles written for the other 49 states. Here’s how it actually works in Texas.
The 80% rule
On your primary residence (your homestead), all the loans against the home combined can’t exceed 80% of its value after the cash-out closes. If your home appraises at $400,000, the most total debt you can walk away with is $320,000 — your current balance, the new cash, and any financed costs all have to fit inside that number.
There’s no way around this one, and honestly, it’s part of why Texas homeowners weathered past housing downturns better than most states. The equity cushion is mandatory.
The 2% fee cap
Lender fees on a 50(a)(6) loan are capped at 2% of the loan amount. A handful of third-party charges — the appraisal, the survey, the title insurance premium — sit outside the cap, but the lender’s own fees can’t blow past it. This rule quietly protects you from the junk-fee stacking that shows up in other states, and it’s one reason some out-of-state lenders simply don’t offer Texas cash-out loans at all. A broker who works these loans regularly knows which lenders price them cleanly.
The 12-day wait
A Texas cash-out can’t close until at least 12 days after you apply and receive the required consumer disclosure (everyone calls it the “12-day letter”). There’s also a 3-day right of rescission after closing — you can change your mind and cancel — and the closing itself must happen at a title company, lender’s office, or attorney’s office, not at your kitchen table.
None of this is a problem if your loan officer builds it into the timeline from day one. It becomes a problem when someone quotes you a two-week close that was never legally possible.
One at a time, once a year
Texas allows only one 50(a)(6) loan on your homestead at a time, and once you close one, you can’t close another for 12 months — even with a different lender. So the “take a little now, come back for more later” strategy doesn’t work here. It pays to think through how much cash you actually need before you close.
“Once a home equity, always a home equity” — mostly retired
For years, once you did a Texas cash-out, every future refinance of that loan stayed locked in the restrictive A6 box forever. A 2017 constitutional amendment softened this: after 12 months, you can refinance a 50(a)(6) into a regular rate-and-term loan — no new cash out, total debt within 80% of value, with the required disclosures. That matters, because regular refinances typically price better than A6 loans. If you did a cash-out years ago and were told you’re stuck, that advice may simply be out of date.
What these rules don’t apply to
Section 50(a)(6) governs your homestead — your primary residence. Cash-out loans on investment properties and second homes in Texas follow normal national rules: no 2% cap, no 12-day letter, and lenders will typically go to different LTV limits. Investors pulling equity out of a San Antonio rental are doing a conventional or DSCR cash-out, not an A6 loan — a completely different conversation.
It’s also worth knowing that most government programs sit this one out: FHA and VA cash-out refinances generally aren’t available on Texas homesteads, so A6 loans are almost always conventional.
What this means in practice
- Know your number. The 80% cap plus your current balance sets exactly how much cash is available — that math takes two minutes and should happen before anything else.
- Plan the timeline. Twelve days minimum from disclosure to closing, plus three days of rescission before funds move. A realistic A6 close is measured in weeks, not days.
- Get it once, get it right. The 12-month rule means a second bite at the equity is a year away.
- Revisit old A6 loans. If you’re carrying a cash-out from years back, the 2017 change may let you refinance into better pricing.
Texas built these rules to protect homeowners, and for the most part they do. But they also mean a cash-out refinance here rewards working with someone who structures them routinely. If you’re weighing a cash-out against a home-equity loan or wondering what your 80% number is, start a pre-approval or see the rest of the picture on my refinance page — I’ll run your actual numbers, not a generic calculator’s.
Questions about your situation?
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