Can I get a cash-out refinance or HELOC on an investment, rental, or non-primary property?
Usually, yes. A cash-out refinance on a rental or investment property is allowed under standard Fannie Mae and Freddie Mac guidelines in every state, Texas included. HELOCs and second mortgages on rentals exist too, from lenders that choose to offer them. Expect tighter rules and higher pricing than on the home you live in. In Texas, the state's special home equity loan and HELOC are for your homestead only.
Last updated September 29, 2026Can I do a cash-out refinance on a rental property?
Generally yes. It follows the standard agency guidelines for investment properties, in Texas as well as everywhere else. People sometimes hear that Texas law blocks cash-out on rentals. It doesn't. What Texas restricts is one specific product for the home you live in.
What does Texas's homestead rule actually cover?
The Texas Constitution (Article XVI, Section 50(a)(6) and Section 50(t)) creates the Texas home equity loan and Texas HELOC. They come with borrower protections, including an 80% loan-to-value cap, a cap on fees and a 12-day waiting period before closing. Those loans, and those protections, apply only to your homestead. A rental or investment property in Texas isn't covered by them, so any equity loan on it is an ordinary loan under the lender's own rules.
How is this different from the VA's rule?
They're separate rules from separate places. The Texas limit comes from the state constitution and covers one loan product. The VA's rule comes from the VA loan program: a VA cash-out refinance generally requires that you live in the home. Don't assume one explains the other.
What should I expect on price and terms?
A cash-out refinance or equity loan on an investment property is priced higher than the same loan on a primary residence. Fannie Mae's loan-level price adjustments, for one, add more for investment properties. Lenders also commonly set lower loan-to-value limits and ask for more cash reserves on non-primary homes.
It depends on your situation:
- Texas, cash-out refinance on a rental: generally allowed under standard agency guidelines.
- Texas, home equity loan or HELOC on a rental: the state's Section 50 loans don't apply, so it would be an ordinary loan, if a lender offers one.
- VA loan, cash-out refinance: you'll generally need to live in the home.
- Outside Texas: no homestead-only limit like this, but lenders still apply their own credit, loan-to-value and reserve rules to non-primary homes.
| Cash-out refinance (agency guidelines) | Yes, in every state including Texas |
|---|---|
| Texas home equity loan or HELOC (Section 50) | No, homestead only |
| VA cash-out refinance | Only if you live there |
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Sources
- https://law.justia.com/constitution/texas/sections/cn001600-005000.html
- https://themortgagereports.com/113143/texas-investment-property-cash-out-refinances
- https://jd.mortgage/texas-heloc
- https://selling-guide.fanniemae.com/sel/b2-1.3-03/cash-out-refinance-transactions
- https://singlefamily.fanniemae.com/media/20786/display
- https://selling-guide.fanniemae.com/sel/b5-4.1-01/texas-section-50a6-loans
- https://www.va.gov/housing-assistance/home-loans/eligibility
- https://www.benefits.va.gov/homeloans/documents/docs/Wednesday_morning.pdf
- https://singlefamily.fanniemae.com/media/9391/display
Sourced from licensed loan officers and brokers in the FreeRateUpdate network.
Educational information only, not individualized financial or legal advice. Program details and rates change; verify current terms with a licensed loan officer before making a decision.