I'm Bond Peter Njoku, a licensed Mortgage Loan Officer (NMLS #2670329), and if you've ever wondered why a Texas cash-out refinance seems to work differently than what a friend in another state describes, you're not imagining it. Texas is the only state with a constitutional provision — Article XVI, Section 50(a)(6) — specifically governing how homeowners can pull cash out of a primary residence. It's designed to protect homeowners from over-leveraging their homestead, and it changes several things about the process.
What Section 50(a)(6) Actually Requires
Texas's homestead protection law caps a cash-out refinance on your primary residence at 80% combined loan-to-value. That means after your new loan closes, you must retain at least 20% equity in the home — no exceptions, regardless of your credit score or income. This is stricter than many other states, where cash-out LTV limits can run higher, and it's the first thing I calculate for every Texas homeowner considering this move.
| Rule | Texas 50(a)(6) Requirement |
|---|---|
| Maximum combined LTV | 80% |
| Frequency | Once per calendar year on the same homestead |
| Waiting period | 12 days between application and closing |
| Eligible property types | Primary homestead only (not investment or second homes) |
| Closing location | Must close at a title company, attorney's office, or lender's office |
| Right to rescind | 3 business days after closing |
Calculating Your Available Cash
Here's how the math works in practice: if your home appraises for $400,000, the maximum combined loan amount under the 80% LTV cap is $320,000. If your existing mortgage balance is $220,000, you could potentially access up to $100,000 in cash, minus closing costs — but I always build in a buffer rather than maxing out to exactly 80%, since home values can shift and I want my clients to have breathing room.
| Home Value | 80% LTV Cap | Existing Balance | Approx. Cash Available |
|---|---|---|---|
| $350,000 | $280,000 | $200,000 | ~$80,000 |
| $450,000 | $360,000 | $260,000 | ~$100,000 |
| $550,000 | $440,000 | $320,000 | ~$120,000 |
The 12-Day Waiting Period and Once-a-Year Rule
Two rules trip up more Texas homeowners than any others. First, there's a mandatory 12-day waiting period between when you apply and when you can close — it exists to give you time to reconsider, and it's not something any lender can waive. Second, you can only complete one 50(a)(6) cash-out refinance per calendar year on the same homestead, so if you've already done one this year, you'll need to wait until the following year for another. I map out both of these timelines with clients up front so there are no surprises mid-process.
Cash-Out vs. HELOC vs. Rate-and-Term
A cash-out refinance isn't your only option for accessing equity — a home equity line of credit (HELOC) is also governed by the same 50(a)(6) rules in Texas, and I've written a full comparison in my cash-out refinance vs. HELOC guide. If you don't need cash and simply want a better rate, a standard rate-and-term refinance avoids the 50(a)(6) restrictions entirely, since those rules only apply when you're pulling cash out of your homestead.
Next Steps
If you're sitting on meaningful equity and considering a cash-out refinance, call or text me at 469-545-7180 and I'll run your specific numbers against the 80% LTV cap before you commit to anything. You can also check my Dallas location page or browse my other DFW location pages for local market context, and visit my refinance program page for a full comparison of your options.
Frequently Asked Questions
What is a Texas 50(a)(6) cash-out refinance?
It's the constitutional provision in the Texas Constitution that governs how homeowners can pull equity out of their primary residence, named for Article XVI, Section 50(a)(6). It caps your loan-to-value ratio and adds specific consumer protections not found in other states. I'm Bond Peter Njoku (NMLS #2670329) — call or text me at 469-545-7180 to see how it applies to your home.
What is the maximum loan-to-value for a Texas cash-out refinance?
Texas law caps a cash-out refinance on a homestead property at 80% combined loan-to-value, meaning you must retain at least 20% equity in your home after the new loan closes. I'm Bond Peter Njoku (NMLS #2670329), call or text me at 469-545-7180 to calculate your available cash based on your home's current value.
How often can I do a cash-out refinance on my Texas home?
Texas law limits you to one 50(a)(6) cash-out refinance per calendar year on the same homestead property, and there's also a mandatory 12-day waiting period between application and closing that doesn't apply to standard refinances. I'm Bond Peter Njoku (NMLS #2670329) — call or text me at 469-545-7180 to plan your timeline.
Can I convert a Texas cash-out refinance back to a standard loan later?
Yes — once you've done a 50(a)(6) cash-out refinance, the loan carries that designation permanently unless you later refinance again without taking additional cash out and sign the required affidavit, at which point it can convert back to a rate-and-term loan for future LTV purposes. I'm Bond Peter Njoku (NMLS #2670329) — call or text me at 469-545-7180 for details on your specific situation.
Calculate How Much Cash You Can Access
I'm Bond Peter Njoku (NMLS #2670329). I'll run your home value against Texas's 80% LTV cap and map out the 12-day waiting period so you know exactly when you could close. Call or text me at 469-545-7180, message me on WhatsApp, or start your pre-approval online.