Can I get a cash-out refinance or HELOC on an investment, rental, or non-primary property?
Yes to both, in most cases: an ordinary cash-out refinance is allowed on an investment or rental property nationwide under standard agency guidelines, including in Texas, and a HELOC or second mortgage is generally allowed too, except in Texas specifically, where the state's special home equity loan product only works on your primary residence (homestead), not on rental property. Outside of that one state-law wrinkle, both products are generally available on non-primary homes, just with tighter qualifying rules and higher rates than you'd get on a primary residence.
Last updated July 22, 2026Can I do a cash-out refinance on a rental or investment property?
Generally yes. Cash-out refinancing on an investment or rental property follows standard Fannie Mae and Freddie Mac guidelines nationwide, and that includes Texas. It's a common misconception that Texas law blocks cash-out refinancing on rental property outright, it doesn't. What Texas law does restrict is a specific product, not cash-out refinancing as a category.
Can I get a HELOC or second mortgage on a rental or investment property?
This is where state law can actually get in the way, and Texas is the clearest example. The Texas Constitution (Article XVI, Section 50(a)(6) and Section 50(t)) creates a special "Texas Home Equity Loan" and "Texas HELOC," each with its own protections: an 80% loan-to-value cap, a cap on fees, and a mandatory 12-day cooling-off period. Those protections, and that product, apply only to a borrower's homestead. A non-homestead property, meaning a rental or investment home, cannot use this particular loan type in Texas. Outside of Texas's state-specific rule, HELOCs and second mortgages are generally available on investment properties elsewhere, subject to each lender's own qualifying rules.
How is this different from the VA occupancy rule?
The Texas homestead restriction is a state-law rule tied to a specific loan product. It's separate from, and broader than, the VA's own occupancy requirement, which says a VA cash-out refinance generally requires the property to be (or have been) the borrower's primary residence. These are two different rules from two different sources: one from Texas's constitution, one from VA program requirements. Don't assume one explains the other.
What rates and terms should I expect?
Where cash-out refinancing or a HELOC is available on an investment property, expect worse pricing than you'd get on a primary residence. As of 2026-07, rough market ranges are roughly 6% to 7% for a first-lien cash-out refinance and roughly 7% to 12% for a HELOC or second lien, depending on credit and loan-to-value. Many lenders commonly apply stricter loan-to-value limits and reserve requirements on non-primary properties as well.
It depends on your situation
- You're in Texas and want a HELOC or home equity loan on a rental property: not available under the Texas Section 50 product; that loan type is homestead-only.
- You're in Texas and want an ordinary cash-out refinance on a rental property: generally allowed, following standard agency guidelines rather than the special Texas homestead rules.
- You have a VA loan and want to cash-out refinance: the VA's occupancy requirement applies, separate from any state homestead law.
- You're outside Texas: state-specific homestead restrictions like Texas's are the exception, not the rule, but every lender still applies its own credit, loan-to-value, and reserve rules to non-primary properties.
| Product | Available on investment/rental property? | Key rule |
|---|---|---|
| Ordinary cash-out refinance (agency guidelines) | Yes, nationwide including Texas | Standard credit/LTV rules apply |
| Texas Home Equity Loan / Texas HELOC (Tex. Const. art. XVI ยง50(a)(6)/(t)) | No, homestead only | 80% LTV cap, fee cap, 12-day cooling-off period |
| VA cash-out refinance | Occupancy rule applies | Generally requires primary-residence occupancy |
Related questions
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- what determines your mortgage rate quote
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
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.