Texas
Texas VA IRRRL: The Refi That Still Works on a Homestead
Texas locks down cash-out on a homestead, but the VA streamline stays legal and simple. Home Loans Inc is not licensed in Texas, so read this to know the ground, then shop a Texas lender.
Home Loans Inc is not licensed in Texas and cannot take a Texas application. We lend in South Carolina, North Carolina, Virginia, West Virginia, Florida, Georgia, Alabama, Mississippi, Iowa and Wyoming.
Why Texas is different
The constitution has opinions about your house
Texas is the one state where cash-out refinancing is written into the constitution. A homestead cash-out under Section 50(a)(6) comes with an 80% combined loan-to-value cap, a 2% fee cap, a 12-day cooling-off notice, a once-every-12-months limit, and it can only close at a lender, title or attorney office. FHA and VA cash-out are effectively off the table on a Texas homestead.
None of that is your problem if you want a streamline. A VA IRRRL is a no-cash-out refinance, and Texas allows it on a homestead along with ordinary rate-and-term deals. That is a big deal here, because for a lot of Texas veterans the IRRRL is the cleanest VA refinance left on the menu.
Before we go further: Home Loans Inc is not licensed in Texas. I cannot take your application. I wrote this so you know the rules cold when you talk to a Texas licensed lender.
Signatures and closings
What a Texas IRRRL closing looks like
Texas refinances are closed by licensed escrow officers at a title company. You do not need an attorney, though document preparation is regulated. Closings are wet, and funds are held through rescission.
Homestead protection in Texas is very strong under Article XVI, Section 50 of the constitution. On a homestead refinance, a spouse who is not borrowing or not on title must still sign the deed of trust. Plan for both of you to be there or to sign properly. Do not let a missing signature push your closing a week.
On fees, Texas does not charge a special refinance tax. A refinance does not create a new deed transfer, so you are looking at recording fees. The state uses non-judicial foreclosure. If you ever did a 50(a)(6) cash-out in the past, know that such a loan can later be converted to a non-home-equity 50(f)(2) rate-and-term refinance if no cash is taken and the rules are met, but that is a conventional conversation, not a VA streamline one.
VA ground rules
What must be true to streamline
It must be VA now
The IRRRL refinances a VA loan into a VA loan. An FHA or conventional loan on your Texas house is not eligible.
Time in the loan
At least 210 days past your first payment due date and six payments on the books, whichever comes later.
Payback period
Your costs must be recovered by your monthly savings within 36 months, or VA will not allow it.
Real benefit
A lower rate or moving from an ARM to a fixed rate. It has to help you, not the lender.
The funding fee is 0.5%, and veterans receiving VA disability compensation are exempt. VA usually does not require an appraisal or income verification on a streamline, though some lenders add overlays. On occupancy, you only certify that you lived in the home before. Texas has a lot of soldiers who bought near one post, got orders to another, and kept the first house. That house can still be streamlined.
Post by post
A quick tour of military Texas
Texas has a massive military population, and the VA loan follows it.
- San Antonio: Joint Base San Antonio, covering Lackland, Randolph and Fort Sam Houston, is the largest joint base in DoD.
- Killeen: Fort Cavazos, formerly Fort Hood, home of III Corps and the largest active-duty armored post.
- El Paso: Fort Bliss and the 1st Armored Division.
- Dallas-Fort Worth: NAS JRB Fort Worth, a Navy and Marine Reserve base.
- Houston: Ellington Field JRB for Guard and Reserve.
- Corpus Christi: NAS Corpus Christi trains Navy pilots.
- Abilene, Del Rio, Wichita Falls and San Angelo: Dyess, Laughlin, Sheppard and Goodfellow Air Force Bases.
- Texarkana: Red River Army Depot.
Wherever you are in that list, the streamline works about the same, since it usually skips the appraisal. Houston and Corpus Christi owners should still keep their flood and coastal insurance current, because no lender closes on an uninsured house.
Last word
How to shop a Texas streamline
Ask each Texas lender three things. What is my break-even month? Do you add any overlays beyond VA? Who has to sign at closing? If the first answer is past 36, or the third answer is a shrug, keep shopping. Texas has plenty of licensed lenders. Make them compete.
Texas VA IRRRL questions
Can I do a VA cash-out refinance on my Texas homestead?
Effectively no. Texas caps homestead cash-out under Section 50(a)(6), and FHA and VA cash-out are effectively not allowed on a homestead there. A VA IRRRL is a no-cash-out refinance, and Texas does allow it, along with standard rate-and-term refinances.
Does my non-borrowing spouse sign at a Texas IRRRL closing?
Yes, on a homestead. Texas homestead protection under Article XVI, Section 50 requires a non-borrowing or non-titled spouse to sign the deed of trust. Plan the signing for both of you so the closing does not stall at the title company.
Who closes a refinance in Texas, an attorney or title company?
Licensed escrow officers at a title company close Texas refinances. An attorney is not required, though document preparation is regulated. Closings are wet, with funds held through rescission. Expect recording fees but no special state refinance tax.
I PCSed from Fort Cavazos to Fort Bliss. Can I streamline the Killeen house?
Likely yes, if the Killeen loan is VA. An IRRRL only requires that you certify prior occupancy, so a home you lived in before orders moved you can still qualify, as long as seasoning, the 36-month recoup and net tangible benefit check out.
Will Home Loans Inc take my Texas VA streamline?
No. Home Loans Inc is not licensed in Texas and cannot accept the application. This page is for education. Take these rules to a Texas licensed lender and ask for the break-even month and any overlays in writing.