A homestead credit line can pay out under the standard reverse mortgage Texas homeowners use, with your home as security. That product is called a Home Equity Conversion Mortgage, or HECM. In Texas, between October 2025 and August 2026, HUD insured 1,570 HECMs, which is 7.03% of all such loans nationwide. Out of the 50 states plus the District of Columbia, Texas came in 3rd out of 51. For the loans counted in Texas, the median home value was $305,000. That produced a $135,547 median initial principal limit, with the median note rate at 5.875%. The initial principal limit is the total you can borrow at the start, before any fees come out. You’ll begin with a counseling session at 1 of the 9 HUD-approved agencies located in Texas.
Texas school homestead exemptions of $140,000 and $60,000
Federal reverse mortgage rules still require you to pay your property taxes and keep your homeowners insurance current. Keeping the home in good condition and living there as your main residence are also your responsibilities. Your loan can go into default if you get behind on property taxes. So state tax breaks make a big difference. A residence homestead exemption shrinks your tax bill because it excludes a portion of your home's value from being taxed. For your main home, school districts are required to grant you a $140,000 exemption under Texas Tax Code Section 11.13. Once you're 65 or disabled, school districts are required to apply an extra $60,000 exemption. Your local taxing units also have the ability to offer you an exemption if they choose. Turn in your application to the county appraisal district before May 1.
At 65, can you freeze or postpone your property taxes in Texas?
The over 65 or disabled homestead exemption gives you a ceiling on your school taxes when you're eligible. It holds your school taxes at the level you paid during the year you became eligible. That same exemption also lets you request a property tax deferral. A deferral pauses your property tax payments for as long as you stay in the home. Your tax debt isn't wiped out. Each year, 5% interest is added to your deferred taxes until the deferral is lifted.
Federal regulations and the Texas Constitution's Article XVI, Section 50
Voters changed Section 50, Article XVI of the Texas Constitution on November 8, 2005 to permit reverse mortgage credit lines on homesteads. Your funds can sit in the credit line and you only take out what you actually need. Between October 2025 and August 2026, Texas borrowers also took 57 HECMs for home purchases and 135 for refinances. The national lending limit of $1,249,125 was reached by another 19 loans. You're also safeguarded by Regulation Z federal rules, no matter where you live in the country. In writing, your lender has to tell you that finishing the loan isn't mandatory, even if you've signed an application or received disclosures.
Are lenders overseen by the Texas Department of Savings and Mortgage Lending?
The Texas Department of Savings and Mortgage Lending licenses and oversees the state's mortgage business under the authority of the Finance Commission of Texas. The department also grants charters to thrift institutions across the state. In Texas, 157 active reverse mortgage lenders insured a total of 2,012 HECMs in fiscal year 2025, and you can compare them all. You're entitled to submit a consumer complaint to the department whenever an issue comes up. You’re allowed to file a complaint about residential mortgage loan originators, mortgage companies, servicers or state savings banks. A Recovery Fund is also kept by the agency for people who suffer financial harm from licensed individuals. You can call the department at 512-475-1350 or 877-276-5550.
