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Texas a6 cash out refinance: Find out how to qualify for it

Author: Jessica Bennet
Community Mentor
Ask Jessica
Posted on: 14th Mar, 2007 11:37pm
In the state of Texas, there is a law pertaining to cash-out refinance. This law is known as Texas cash out 50(a)(6). This is more popularly known as Texas a6 law. Under Texas refinance laws, you are required to take out a cash out loan of 80% of the appraised value of the property.

If you are a US citizen, a permanent resident alien or a non-permanent resident alien, then you may be eligible for this loan. However, if you are a foreign national or a borrower with diplomatic immunity, then you will not be eligible for this loan.

Eligibility criteria for Texas a6 cash out refinance

Eligibility criteria to get approved for Texas a6 cash out refinance are listed below.


Single family residences, warrantable attached/detached condos and PUDs classified as homestead under Texas a6 laws. Non-warrantable condos, non-warrantable Planned Unit Developments (PUDs), manufactured home etc. are however not eligible. Anyways, the minimum property area should be 600 sq ft. Property must be classified as a homestead under Texas refinance laws.

Credit score and DTI

The minimum credit score required for this is 620. In addition to this, the maximum permissible DTI (debt to income) ratio is 45%.

Credit history

You should have established a good credit score after you have filed bankruptcy and/or foreclosure. If your property has been foreclosed, then the waiting period to get approved for this loan is 7 years.


A continuous employment of 2 years is required. For self-employed persons, proper documentation of income is required.


Assets that are used to close the transaction must be disclosed. Funds that you use in the transaction must come from a verified source.
While taking out this loan, you should follow the Texas a6 cash out refinance rules properly. It is advised that you should get the help from a mortgage attorney for this.
Posted on: 14th Mar, 2007 11:37 pm
hi, has anyone here heard of texas a6 cash out refinance rules or something like that? i am looking to refi my property in texas. any info will be helpful.
Hi Norm,

Welcome to the forum.

In this community also there are lots of discussions on Texas A6 laws community members and lenders. You can this discussion to her at

Best of luck,
Posted on: 29th Apr, 2008 03:15 am
Hello Norm.

You can find information on Texas a6 law the The Texas Constitution site. Go to Section 50 and check out (a)(6) and specially point (B) and (C) at
Posted on: 29th Apr, 2008 03:34 am
I used to work for a Lender that would not do Cash out refi's in suburban areas of texas just urban and rural.

Is this a Lender requirement or Texas requirement?

Posted on: 07th May, 2008 09:21 am
HI Eric,

I don't think it is a state's requirement. It may be the lenders requirement.
Posted on: 07th May, 2008 11:24 pm
I refinanced my loan into an arm 3 yrs ago and now want to get a fixed loan. My credit score has fallen so that I cannot get a conv loan; but because I took cash out of the equity when I refinanced, I am being told I cannot get a govt. loan right now. Is that correct? I did not know anything about this Tx A6 loan.
Posted on: 29th Aug, 2008 03:58 pm
Hi Mikek,

Welcome to forums.

You need to check out the state laws. You cannot have more than 1 Texas A6 loan at a time and it cannot be done if the total financing you need is more than 80% of the home value. So probably you're getting denied because of a higher LTV. By the way, did you ask the lenders why you were being denied? it's very important because it may help you eliminate the cause of the loan denial.

Posted on: 30th Aug, 2008 12:06 am
When calculating the 3% fee restriction for Tx(A)(6) loans. Should I subtract the aggregate adj from the total impounds?
Posted on: 12th Sep, 2008 03:35 pm
I think you should talk to a lender offering Texas A6 loan regarding any calculation on the 3% fee restriction.
Posted on: 13th Sep, 2008 01:23 am
I understand the rule about the subject property being a primary home or "homestead". But what we have run into is a situation where the borrower has disclosed that the subject property is now an investment home but is still labeled as his "homestead" since it is the only home he owns. The title company will not close close this loan unless we call this an (a)(6) refi since the county still shows this as homestead, but it is NOT his primary. Has anyone encountered this?
Posted on: 14th Oct, 2008 11:38 am
Hi Dianne!

Your query has been answered by a community member in the given link. Please have a look:


Posted on: 15th Oct, 2008 02:04 am
ok... so ... 2 years ago I got a conventional loan and paid off some debt from the equity of my house did not exceed 80% LTV ... I currently pay a 9% interest rate... I want to refinance to an FHA Fixed 30 year and I qualify for a 6% fixed rate... but Im being told I cant do that ... WHY!!?? I have good credit (700 mid fico) my DTI will be 29% ... and my LTV is 80% !!! what is the deal?? HELP!!??
Posted on: 26th Nov, 2008 06:21 pm

Did you ask the lender why he is not letting you refinance the mortgage? As far as I can understand, you should be able to refinance the mortgage.

I think you should consult some other lenders and check out what they have to say in this regard. It is not mandatory to refinance the loan from the original lender. You can also consult the lenders of this community and get a no-obligation free mortgage quote from them. Then you can compare the rates and select the best option.


Posted on: 27th Nov, 2008 12:50 am
i want to make sure i am gathering and processing this information correctly. the law prevents more than one cash out (whether it be a refinance with a cash out or a home equity loan or line of credit) on a texas primary property within 12 months and 1 day. if this is not correct please correct me.
Posted on: 09th Dec, 2008 06:41 am
Hi Barbara!

Welcome to forums!

As far as I know, Texas refinance law states that if you have a home equity loan, it can only be refinanced with another home equity loan though you are not taking any more cash out of your home. Moreover a home equity loan cannot be refinanced within 12 months from the date of closing.

Feel free to ask if you have further queries.

Posted on: 10th Dec, 2008 09:14 pm
What if I am trying to refinance thru a VA loan, I talked to them and they said I could, however the state of Texas says I can't, is there any way to get around what the state says.
Posted on: 30th Dec, 2008 09:37 am
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